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People who lack easy and affordable access to traditional bank accounts can benefit from cryptocurrency services that allow them save on remittance fees, pay bills on time and stay liquid.
July 22 -
Trying to keep up with developments in mobile financial services can be a dizzying prospect. Banks are fearful of being left in the dust, yet they are hesitant to make a big bet on mobile that could possibly distinguish them from the rest of the field but could just as easily fail.
April 26 -
The new American Express film Spent offers an opportunity to consider some emerging strategies aimed at helping low-income and struggling middle-class Americans avoid or get out of debt.
June 20 -
Theres no magic potion for providing low-income people with low-cost financial services. But the combination of technology, ingenuity and the capitalist incentive has solved many problems before.
June 24
Community banks are under a lot of pressure to compete with national institutions. Their salvation may lie in catering to an unlikely group the 68 million low- and middle-income consumers who have relationships with banks but also rely on money orders, check cashers, payday lenders and pawn shops for other financial services.
Financially underserved customers are a natural fit for community banks. The segment greatly resembles the original populations that gave birth to many Main Street banks and savings & loans. Smaller banks and credit unions can tap into this booming market by rethinking their concept of checking accounts and offering a low-cost, low-maintenance product.
If your perceptions of the underbanked have stayed the same for the past 30 years, it's time to hit the reset button. The underbanked population now includes more than 20% of all U.S. households, according to a May 2013
All this is to say that the underbanked population includes a wide range of customers who have been driven away from mainstream financial institutions by high balance requirements, overdrafts and monthly fees. Others feel intimidated or uncomfortable in bank lobbies. Non-native English speakers can find language to be a barrier, too.
With the right product, these customers can be won back. But many big banks have deemed the cost of carrying low-balance checking accounts too high. Instead they funnel underbanked customers into
Community banks can offer underbanked customers a far better alternative with entirely electronic checking that is, checking accounts without the paper checks. A number of banks have recently launched
Because debit products are affordable for both the bank and account-holders, they can be an excellent way to attract new customers, demonstrate personal service and cross-market other products. Banks that try this out might also consider launching an automatic statement savings account, which is an unmet need for many prepaid customers.
Underbanked customers may need more individualized advice and guidance than traditional account-holders. But taking the time to help customers is something that community banks do well and a service that breeds loyalty. Our job is to get in the game before it's too late.
Kevin B. Tynan is senior vice president of marketing at Liberty Bank for Savings in Chicago. He can be reached at ktynan@libertybank.com.