Opportunity: Expand Access to Your Financial Products & Services by Engaging 100 Million Americans.

An FDIC (2013) study shows "that the existence of unbanked and underbanked households presents an opportunity for banks to expand access to their products and services and forge relationships with these underserved groups, ultimately increasing economic inclusion."

How many unbanked and underbanked people? 68 million people are under-banked and 25 million people are unbanked. In terms of households that equals 24 million under-banked households, and 10 million unbanked households.

Who is most likely to be under-banked? African-Americans (33%), Hispanics (29%), Unmarried female-headed families (29%), unmarried male-headed families (28%). It's not just a minority issue: The under-banked rate among Whites is 16%.

What kind of financial products/services do they use? Unbanked (74%) and under-banked (42%) households are significantly more likely to use Alternate Financial Services (AFS) than banked households (9%).

What is included in Alternate Financial Services? Money orders, check cashing, remittances, pawn shops, payday loans, refund anticipation loans, rent-to-own, auto title loans, etc.

Negative consequences of current AFS practices? High fees charged by AFS businesses; current practices may actually worsen the financial situation of AFS users (refinancing of debt, rollovers, flipping); dependency on AFS and isolation from traditional banking system.


  • Deliver high-quality, customer-centric Alternate Financial Services (AFS) to underbanked and unbanked households. Many AFS users are paying higher fees and end up in a worse financial situation. A significant business opportunity exists for the right company to target the right customer segments, with the right products/services.
  • Establish foundational insights about the target segments, share broadly throughout the organization (marketing, product, risk, financial, etc.) and brainstorm hypothesis and implications for your organization, determine implications for your marketing, product and distribution efforts.
  • Reach the 25 million underbanked households (68 million people) via mobile phones and smartphones as the vast majority of households (83%) report access to a mobile phone, of which two-thirds were smartphones. In fact, relative to fully banked households, underbanked households were somewhat more likely to have access to a mobile phone or smartphone.
  • Engage under-banked via the Internet. 8 out of 10 under-banked households have Internet access - the same as fully banked households. And, it is possible to reach 4 out of 10 unbanked households via the internet.
  • Develop segment-specific integrated marketing campaigns. Don't use a one-size fits all model. Use of banking and AFS varies by income, education, age, gender, marital status, and ethnicity/race.