Women's Day: Are Banks, Fintechs Doing Enough For Women's Digital Financial Literacy?

India saw a growth wave in digital finance spurred by smartphone penetration, government policies such as Jan Dhan Yojana and UPI, and the entry of fintech companies. Although these innovations have contributed to financial inclusion, the gender gap in digital financial literacy is one of the largest challenges. Women, particularly in rural and semi-urban areas, are ill-prepared with the information and self-confidence to engage with digital financial services and are thus prone to fraud and financial exclusion. Are banks and fintech institutions doing enough to bridge this gap?

The Gender Divide in Digital Financial Literacy

According to 'India Inequality Report 2022: Digital Divide' published by Oxfam states that less than 32 per cent of women in India own a mobile phone - compared to over 60 per cent of men. UNFPA's National Family Health Survey (2019-2021) states that only one 3 women in India (33 per cent) have ever used the internet, compared to more than half of men (57 per cent). Only 25 per cent of rural Indian women use the Internet, as against 49 per cent of rural men. The gap is even bigger among farmers with just 17 per cent of rural female farmers using the internet, compared to 35 per cent of rural male farmers, states a research paper titled Extension Strategies For Bridging Gender Digital Divide by Parnika Saha, Ajay Kumar Prusty and Chinmaya Nanda.

 This digital divide limits their access to online banking, UPI payments, and investment platforms. Cash-based transactions are the go-to for most women due to low familiarity with digital finance, and concern for cybersecurity is an additional inhibiting factor to adoption.

According to Kalpana Ajayan, regional head of South Asia, Women's World Banking, "Digital financial literacy has long been a cornerstone of financial inclusion efforts, guided by the Reserve Bank of India’s mandate for Financial Literacy Centres across the country. Many livelihood programs run by civil society organisations include a strong component of digital financial literacy. Banks and financial institutions create marketing materials, customer awareness, and product/services related content, however, while these efforts are valuable, they often lack a women-centered approach".

Historical barriers like lower levels of literacy, social conventions of restricting women's economic autonomy, and less access to training opportunities are some of the reasons for the gap. Even city women with smartphones may avoid using financial apps due to a lack of confidence and familiarity.

Are Banks Doing Enough?

Banks have tried to raise the level of financial literacy of women. Although large banks participate in financial literacy activities, these are primarily in basic banking, and not in digital finance. A few notable efforts are:

• Financial Literacy Centres (FLCs): Set up by the Reserve Bank of India (RBI) and operated by banks, these centres aim to educate people about banking services but rarely emphasise digital transactions or cybersecurity.

• Women-Focused Banking Services: Some banks, like SBI’s ‘ Stree Shakti’ scheme, Dena Shakti scheme by Dena Bank, Mahila Udyam Nidhi Scheme by SIDBI, Cent Kalyani by Central Bank of India, Mudra Yojana and Stand-Up India scheme by the central government, offer women-centric products, but these do not always include dedicated digital literacy training.

• Customer Awareness Drives and Support: Banks utilise SMS reminders and app alerts to drive awareness among customers, but the same may not be effective with low digital literacy women.

Union Minister of Finance, Nirmala Sitharaman, announced in her Budget Speech on 1st February 2025, that the government will facilitate a Rs 2 crore term loan for 500,000 first-time women entrepreneurs from the SC and ST communities. But at the same time, accessibility is a significant issue. The majority of financial literacy initiatives assume women will travel down to branches or visit in person for physical workshops, which is not feasible due to mobility concerns or domestic duties. Easy online learning through mobile-based easy-to-use platforms might be more rewarding.

"Our experience with programs promoting savings engagement and UPI adoption — implemented in collaboration with public sector banks, NPCI, and fintechs — shows that community-based women agents play a critical role in building women's digital financial capabilities. Especially, given that women need privacy, a sense of control and confidentiality when dealing with their finances. These agents are not only trusted by women but also deeply understand their local context, making them effective in helping women navigate digital financial services. Investing in such women-led models amplifies the reach and impact of financial inclusion efforts", says Ajayan.

Fintechs: Innovation Without Inclusion?

Fintech companies, from mobile payments apps, and investment apps, to lending companies, have expanded the reach of the financial system. Their attention, however, to money literacy has its tendency towards how promptly users are recruited into using the digital finance system at the compromise of their digital finance comprehension. Some of the fintech-backed initiatives are as follows:

• User-Friendly Interfaces: Online payment apps like Paytm, PhonePe, and Google Pay make digital payment easy but it is not necessarily translated into literacy in money.

• Online Video Tutorials and Chat Support: Financial technology firms make explainer videos and FAQs available, but the same are typically in English or are not an interactive learning format, hence, not as simply accessible to English-unlettered women.

• Women-Centric Targeted Products: Some fintechs, like LXME, have focused on women's financial education, but the products remain niche until now.

One of the largest failures is that fintech businesses are more concerned with short-term customer acquisition than long-term learning. While some startups plug this gap through local language materials and influencer-driven learning, mass-scale, systematic initiatives remain absent.

What Needs to Change

To empower women in digital finance, banks and fintech require a more inclusive and targeted approach:

• Localised and Interactive Digital Literacy Campaigns: Using local languages, voice-based interfaces, and story formats can increase accessibility.

• Women-Led Digital Training Programs: Collaborating with local women's self-help groups (SHGs) and NGOs can enable peer-to-peer learning models.

• In-App Learning Modules: Banks and fintechs should include simple, interactive financial education modules within their apps to teach women about online banking, fraud prevention, and investment basics.

• Digital Financial Literacy Community Centers: Trained village-based digital kiosks and mobile centres have the potential to facilitate experiential learning among women in a secure setting.

Ajayan also states, "A crucial shift needed is to move from digital financial literacy to digital and financial capability building — equipping women not only with knowledge of financial concepts but also with the skills, confidence, and support to independently use digital financial services. This means enabling women to confidently use digital payments, apps, ATMs, etc. while understanding how these tools can improve their financial lives".

She says, "To unlock the full potential of women’s financial inclusion, digital financial capability building must be embedded at the heart of all digital financial services initiatives. By combining technology, trusted community networks, and behavioural nudges, we can empower women to actively participate in the digital economy, paving the way for their financial security and economic prosperity."