Let’s start with a simple fact.
Banks generally are designed on the one size fits all model – essentially, their attitude to offering you a product is ‘this is what we’ve got – take it or leave it’. And generally, you take it because there’s nothing else.
It doesn’t result in people using financial services less – because their need is still there. Instead, it actually results in them turning to informal and/or illegal financial services to fill the gap. It’s not unusual for people to borrow from loan sharks to pay their bank loans, for example, because the bank loan repayment schedule doesn’t fit their business cash flows and so, sometimes they have a shortage. They don’t want to get blacklisted, and therefore pay two lots of interest – and this could have been avoided if the bank had understood their cash flows and structured the loan repayments accordingly.
This ‘needs gap’ also applies to savings. Why do people save money in jars? Because putting money aside in different places for different purposes helps them save towards specific goals. Unfortunately, banks generally make it super-difficult to open multiple accounts and charge them fees if they don’t maintain a minimum balance in each one of them, making it difficult and inconvenient to access their money when they need it. Net result: instead of the bank getting all their money, it gets maybe 25% of it. Instead of the customer having somewhere that’s safe and out of the way of temptation for them to keep ALL their money, they keep 75% of it in an envelope under the mattress. Lose/lose.
The point is that a bank won’t convince or enable people to change their behaviour if it doesn’t solve the pain points those people face. So, when we decided to start Lucy, we started by looking at who were really not being served well by banks, and then really trying to understand them and their needs.
We saw that entrepreneurs are the life blood of any economy. Everywhere around the world, at all socio-economic levels, micro and small enterprises are a key driver of economic growth. Even more so in the ‘new normal’ – small business registrations grew globally by 32% in 2020. And women entrepreneurs have been shown to generate higher revenues, create more jobs, and use their profits more wisely. Helping women entrepreneurs to succeed has a greater impact all round.
It’s actually a very simple equation. XX=2X. For every dollar of funding, startups founded by women generate 78%, and spend 90% of their income on their families. More than twice the average. To quote Melinda Gates, ‘when money flows into the hands of women, everything changes’.
Empowering and enabling women to start and grow their own businesses makes sense for everyone. Women AND men.
There are 45 million female microentrepreneurs in South East Asia alone. And yet, 70% of women-owned MSEs have inadequate or no access to financial services. One size fits all is really one size fits none – but one size fits none services are typically all that most women get offered, if they get offered any at all. I’ve personally worked in 35+ countries, from South Africa to Pakistan to Vietnam, and I’ve seen that mainstream financial institutions often don’t understand or cater to the real needs of women entrepreneurs. Which is a wasted opportunity for the world.
And so, we at Lucy decided to do something about it. Lucy has been designed from the ground up to provide entrepreneurial women with the tools they need to take control of their financial future, to realise their potential, to grow, and thrive.
From supporting foreign domestic workers to save and start their first business back home, to helping homepreneurs get started after a career break, small and micro business owners to effectively run and grow their businesses, to enabling successful women to invest in other women.
We recognised that entrepreneurship is stressful, scary, and lonely – especially if you’re a woman. Success depends on many different factors, and most entrepreneurs don’t have convenient and affordable access to everything they need. Therefore, we decided to fix that with an integrated suite of holistic services that are delivered seamlessly through our app.
Our approach at Lucy has been to start with the customer; understand their pains and aspirations; and work from there. The result is that, by not being that one-size-fits all solution, we avoid being that one-size-fits-none-lose-lose solution I mentioned earlier.
We’ve started in Singapore and will be expanding to South East Asia and then beyond. We’re leveraging our experience in customer-centric product design and smart use of technology to really make it personal. Our next step is adding in business-building and community tools and bringing Lucy to more countries.
Our technology platform is API-driven at the back end and has been built from the ground up to enable us to be a front-end relationship manager for a range of financial institutions, serving the customers that they don’t understand or want to serve, while bringing them the benefit of a consolidated balance sheet and digital outreach.
More and more women are starting their own businesses – initially driven by necessity due to pandemic-driven retrenchment, now increasingly by choice as part of the ‘great resignation’. Providing them with the support they need to succeed has huge potential to catalyse economic growth at scale.
About Debbie Watkins
Debbie Watkins has 20+ years of experience in technology for finance, mobile-enabled products and services, and business and strategy consulting. Working in over 35 countries, she has led customer-centric market researchs and product development engagements; supported clients in technology platform needs assessment and implementation; managed multi-million-dollar projects in Asia and Africa; and built multi-disciplinary and multi-cultural teams in a number of countries.
About Lucy
Lucy is a neobank built to empower women from all walks of life by equipping them with the financial services and business-building tools that they need to take control of their financial future, grow, thrive and shine. Lucy launched in Singapore in late 2021.
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