Lack of affordable formal banking solutions affects over 15 million adults in the United States. Even as employment numbers improve domestically, the number of unbanked individuals remains stubbornly high.
Financial inclusion has long been a goal in countries around the world. Finding ways to offer solutions that provide financial inclusion for the unbanked and underbanked-and do so profitably for the providers-is the topic of a new research report from the author titled Doing Well by Doing Good: Delivery Models and Channels Serving the Financially Underserved. Solutions that are succeeding in several developing economies are reviewed, and selected solutions in the United States are profiled.
"In the U.S., access to banking services is not the problem that it is in many of the developing countries. Financial services products are readily available, but not always at a price affordable by potential users or with the right fee structure to meet their needs. The ‘unbanked’ are often faced with unpredictable financial balances and can’t always pay the price necessary to keep an account open and current. At the same time, financial institutions need recurring revenue to be able to support technology and regulatory infrastructure, creating a friction that impedes product adoption," commented Sarah Grotta, Director, Debit and Alternative Products Advisory Service and author of the report.
Highlights of the report include:
- The reasons why individuals are unbanked and the difficulties in supplying banking services to affect the population of unbanked in the U.S. materially
- A look at some noted solutions around that world that have been highly successful in their outreach to the unbanked population
- The commonalities of product features and business models among these products
- A discussion of the product and customer experience approach domestically in the U.S. and how that contrasts with examples outside the U.S.
- A comparison of providers in the U.S. categorized as bank providers, program managers or alternative financial services providers.
1. Executive Summary
3. Tracking the Unbanked in the U
4. Successful Implementations Are Making an Impact
- Money on Mobile
- Tigo Money
5. Shared Characteristics
6. Being Unbanked in the U.S
- The Unbanked Customer Experience
- It’s a Card World
- Financial Institutions
- Program Managers
- Alternative Financial Services Providers
- Comparison with the Global Examples
7. Profitably Serving the Unserved in the United States
List of Figures
Figure 1: Percentage of U.S. Unbanked Compared to Unemployment Rate, 2009-2015
Figure 2: U.S. Checking Account Ownership and Use of Check Cashing Services, 2012-2016
Figure 3: Global Unbanked Population Percentages by Region, 2014
List of Tables
Table 1: Bank-Offered General Purpose Reloadable Prepaid Products
Table 2: Program Manager Offered General Purpose Reloadable Prepaid Products
Table 3: Retailer/ AFS Offered General Purpose Reloadable Prepaid Products