-
Empowering the unbanked to save and invest in themselves and others, through technology as simple as text- or Tweet-to-pay, will create opportunities to get people out of poverty.
March 13 -
The universal consumer demand for bill payment makes the service particularly well-suited to bringing people into the financial mainstream.
October 5 -
Serving the unbanked requires a worldview that most industry insiders don't have, but truly need in order to innovate responsibly on behalf these consumers. Here are insights some companies have gleaned from spending a day as the underserved.
October 3 -
The FDIC highlighted continued use of "alternative financial services" in its second-ever survey reporting the share of households that are unbanked or underbanked.
September 12
I participated in on a fascinating discussion of
This
There are a lot of reasons why M-PESA's success may not be so easily replicated in the U.S., mostly related to
When discussing the U.S.'s
Anyone familiar with Lisa Servon's
Instead, these customers are choosing to patronize businesses that put a priority on establishing close, personal relationships a practice, Servon suggests, largely lacking at traditional banks. These relationships, in turn, play a critical role in serving the customer's true financial needs. Here's an example from Servon's
When I input the number from her RiteCheck keytag into my computer, the screen indicated [Marta] owed RiteCheck $20 from every check she cashed. I didn't know what to do, so I turned to Cristina for advice. I learned that Marta had cashed a bad check awhile back, and that RiteCheck had worked out an arrangement in which she could pay RiteCheck back in installments Marta could not pay the $20 todayshe needed her entire check to cover an unexpected expense. "No te preocupes, mamila pr-xima vez." Cristina knew Marta would be good for her debt, and that accommodating her situation was good for business.
An earlier experiment from the Center for Financial Services Innovation in which bank executives were tasked with spending a day in the unbanked's shoes illustrated that managing money can be time-consuming for low-income individuals. "Since there is no one-stop shop for all of their financial needs storing value, paying bills, sending money, saving, borrowing consumers find themselves waiting over and over again, Karen Andres and Romy Parzick
Mobile services like remote deposit capture or money transfers via text or, say,
A mobile bank account is decidedly impersonal. You can't negotiate an alternative payment plan with a smartphone. It's not likely to waive your overdraft fees. Big Data can help make short-term credit more readily available, but customers are still more likely to trust a smiling, well-meaning teller than an algorithm. Particularly if that algorithm was developed by a firm that lost their trust a long time ago.
Access is important, but service and face-to-face interaction are must-haves for low-income customers. This is important for traditional financial firms that are interested in serving this demographic and, yes,
Jeanine Skowronski is the deputy editor of BankThink. You can contact her at