Women and COVID-19 Financial Recovery: Understanding Stigma and Financial Services Deserts

This is one in a series of articles about the pandemic and America’s First Female Recession. See more here.

Understanding the distinct consumer needs of different consumer segments is fundamental to engaging with individuals who experience financial vulnerability and stigma as they approach a post-pandemic financial recovery. Organizations can help to play an important role in supporting customers with their personal financial recovery.

We recently examined the experiences of vulnerable communities in banking deserts. We worked with a credit union that focused on providing services for consumers in a banking desert, which are vulnerable communities that have inadequate or no access to mainstream banks. In two field experiments, we compared credit union customers living in a banking desert to customers who do not live in a banking desert. We found that customers living in a banking desert sought different types of benefits from the credit union: these consumers expressed more interest in patronizing the credit union when they perceived it to offer a communal financial orientation, where building a relationship with the credit union would benefit not only the individual but also their broader community. The findings not only provide novel insights into psychological mechanisms distinctly associated with banking-desert consumers; they also point to a win-win for underserved communities and financial service providers because it helps both improve financial inclusion and increase the viability of serving banking deserts.

In another project, we uncovered the effects of potential stigmas related to illness on customers’ willingness to engage with a firm’s online support community. In two field experiments, we found that consumers who had characteristics that could be potentially stigmatized (e.g., HIV/AIDS) were reluctant to engage with the firm (and seek out beneficial services), unless they were given cues that signaled benevolent intentions from the firm, such as the presence of other consumers who share the stigma.

Synthesizing these insights could help point to implications for women during their journey to a COVID-19 financial recovery. Various studies have shown that women are disproportionately affected by the COVID-19 pandemic, including by increases in family and childcare responsibility, and increases in job loss. For example, women who are no longer in the workforce and face challenges covering day-to-day expenses may anticipate stigmatization. For example, the scarcity of not having money to purchase food for one’s family can be both an immediate stressor and a source of potential stigma. This may be exacerbated for women living in lower-income areas that lack access to mainstream financial services, and for women of color. The aforementioned research suggests several implications for organizations to consider as they work to support and provide services to women during their financial recovery: 

• Consumers living in banking deserts are concerned about their own financial well-being and the well-being of their broader community. Organizations that can develop offerings that not only support financial recovery of the individual customer, but also help build a more sustainable infrastructure for their broader community may experience higher customer engagement rates. 
• Various widely experienced challenges may contribute to fears of stigmatization (food insecurity, income reduction, job loss). Organizations can work to understand potential sources of stigmatizing attributes, and recruit others from a shared community to support financial recovery efforts.
• Individuals anticipating stigma may be hyper-vigilant in search of cues that signal the presence of others facing similar circumstances, as a path to avoiding social devaluation. Organizations that explicitly communicate benevolent messaging and offer a safe space for women in similar contexts to support each other can help lead to greater customer engagement. 

Dr. Maura Scott is the Persis E. Rockwood Professor of Marketing at Florida State University’s College of Business (Ph.D. Arizona State University, M.S. and B.S. Purdue University). Dr. Scott is Joint Editor-in-Chief of the Journal of Public Policy & Marketing (JPP&M). Dr. Scott is the President-Elect Designate for the American Marketing Association’s Academic Council. She also serves on the Board of Directors for the Association for Consumer Research (ACR), as the Industry Perspectives Director. 

Martin Mende is Professor of Marketing and the Jim Moran Professor of Business Administration at Florida State University. His research focuses on consumer-based strategy and transformative service research and has appeared in the Journal of Marketing Research, Journal of the Academy of Marketing Science, Journal of Consumer Psychology, Journal of Service Research, Journal of Public Policy & Marketing, Journal of Interactive Marketing, and others. Dr. Mende serves as Area Editor for the Journal of the Academy of Marketing Science, Associate Editor for the Journal of Service Research, Associate Editor for the Journal of Public Policy & Marketing, and on multiple Editorial Review Boards (e.g., Journal of Marketing). Dr. Mende has taught classes such as Marketing Strategy, Service Marketing, and Retailing. At FSU, he has won college-wide and university-wide teaching awards.

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