What FIs don’t get from underbanked consumers

In official figures, there are 33 million unbanked and underbanked consumers in the United States.

Of those 33 million, a relatively small number – about 7 million or just over 5 percent of the U.S. population – are entirely unbanked, without both a checking account or a savings account. The largest share, the underbanked, make up the remaining 26 million and are defined as consumers who have access to basic bank accounts but are generally unable to use other banking services, such as loans and credit cards.

And it’s the under-banked, i2c CEO Amir Wain told Karen Webster, who are very poorly understood and poorly counted in the United States. That’s because, despite popular associations in most of our minds, our understanding of underbanked customers shouldn’t be limited to low-income, low-credit consumers who just aren’t. qualify for more advanced banking services. This very limited conception of underbanked consumers misses both the scale of the problem, the number of people suffering from it and the scale of the opportunity to solve it.

“One way to think about this is, if you don’t feel like a VIP in your bank, you’re underbanked,” Wain said. “The questions consumers need to ask themselves are: Does my bank really treat me like an important customer? Do they meet my financial needs? Do they treat me like a good customer? “

If the answer is no, Wain told Webster, it’s likely that even people with six-figure incomes still feel under-served at some big banks. This makes the opportunity far beyond prepaid cards as bank account agents – a “much bigger opportunity”.

There are a large number of middle market consumers looking for more profitable banking service without compromising their expectation of high quality service, he said. Building something better for these consumers is the next big opportunity. banking market share.

“We will see an increasing number of companies providing these more profitable but high quality financial services to the American public,” said Wain.

The newly leveled playing field

Until recently, having a large branch network was a mega differentiator for big banks, Wain said. One of the main reasons you could choose a Bank of America or a Chase was the assurance that you could find a branch a few miles from almost anywhere.

“COVID has ended the differentiation of the branch network,” Wain said. “The bank’s customers have learned that they do things more efficiently without having to take the time to visit a branch.”

And since most consumers have been freed from this need, Wain said, financial services innovators like BrightFi – with whom i2c partners to offer low-cost offers rich in features, mobile financial services – are also being freed up to create solutions without the costs and headaches of branch office infrastructure or the integration of multiple legacy systems that make it expensive for banks to offer bank accounts. traditional sight deposit (DDA) to consumers.

And what the numbers have shown time and time again at i2c is that when brands start to think ”digital first, “Everything becomes much more efficient. Wain said the parameters support this belief. Digital capabilities reduce customer service minutes, reduce internal charge disputes, and narrow the gap between ATM usage and point-of-sale (POS) spending.

“We have clear evidence that if you have these digital services, you can cut costs and make it a viable and profitable business,” he said.

Go beyond binary

A move to mobile, Wain said, is not a switch that can be flipped followed by a hasty victory declaration. It is not enough to simply provide a mobile interface with a flashy user experience (UX). Delivering a feature-rich, user-centric and relevant mobile experience is what matters. Basic features such as fingerprint login, easy navigation, and support for a multitude of functions form the baseline. While they can be a differentiator in your mobile banking app, you should consider adding other services that consumers want like the ability to build credit, budgeting tools, fraud monitoring, the definition of personalized alerts, the filing of transaction disputes, etc.

Wain said he sees the mobile interface as an interface that needs to go beyond the simple point of transaction and more towards a complete banking solution. Point solutions require a multitude of technological solutions, from middleware to software integration to global compliance.

“The goal is to have a solution capable of solving a multitude of problems, which is fully integrated and which allows the consumer to choose the services he wants or allows him to create different packages,” he said. .

Wain said he believes giving banking customers a choice of mobile services, powered by a digitally-driven mindset, will deliver a better banking experience for the mass of consumers – far more than the 33 million consumers. that most analysts cite and who are truly underbanked today. .

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NEW PYMNTS DATA: CRYPTOCURRENCY PAYMENTS STUDY – MAY 2021

About the study: U.S. consumers see cryptocurrency as more than just a store of value: 46 million people plan to use it to make payments for everything from financial services to groceries. In the Cryptocurrency Payments report, PYMNTS surveys 8,008 cryptocurrency users and non-users in the United States to examine how they plan to use crypto to make purchases, the crypto they plan to to use – and how merchant acceptance can influence merchant choice and consumer spending.






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