Commentary

The "Underbanked" Bank Outside The Bank

Javelin Strategy & Research’s latest report outlines opportunities for financial institutions, billers, mobile carriers, and bill-pay innovators to enhance the online and mobile options with electronic payments for this underserved population. When it comes to paying bills, too often the nation’s 37 million underbanked American’s do it using hard and costly ways: in cash, and in person, by mail, or by phoning call center’s. The report provides a four-part profile of underbanked Americans, those without a checking account. The report also includes an analysis of how they typically pay seven of the most common bills.

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The U.S. Underbanked are young and come from lower-income brackets (2012):

U.S. Underbanked (% of Population; 2012; An Underbanked consumer lacks a checking account) 

Age Group

Underbanked

All Consumers

   18-24

29%

12%

   25-34

23

18

   35-44

24

20

   45-54

15

20

   55-54

6

15

   65+

5

15

Income Group

   < $15K

28

9

   $15-25K

14

9

   25-35

11

10

   35-50

13

13

   50-75

13

19

   75-100

6

15

   100-150

6

15

   150+

6

11

Source: Javelin Strategy & Research, February 2013

Mark Schwanhausser, Director, Multichannel Financial Services at Javelin Strategy & Research, says “The underbanked are not a homogenous group that can be easily targeted with a one-size fits all approach... there is a win-win ROI opportunity to improve bill payment services and cut processing costs by better understanding and targeting the 15% of Americans who are underbanked.”

When it comes to paying bills, the underbanked are just like Americans at large. They want safe and convenient ways to control the flow of payments. As a result, persuading the underbanked to try paying bills online or on their smartphones is likely to be similar marketing and educational themes that motivates consumers at large.

Javelin Strategy & Research’s How to Build Better Online and Mobile Bill-Pay for the Underbanked is based on the analysis of four online surveys of more than 17,000 consumers. The report contains 35 pages and 13 graphs.

For more information from Javelin Strategy, please visit here.

 

 

1 comment about "The "Underbanked" Bank Outside The Bank".
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  1. Melissa Chyba from Archer Mobile, March 19, 2013 at 9:44 p.m.

    There are a number of mobile solutions that would fit well  with the underbanked age group and income level who have a high smartphone penetration rate (56% for under $15K, Source: Nielsen).   Call center costs could be reduced and operational efficiencies dramatically improved, by delivering dynamic alerts to their smart phones.  My company works with several banks, municipalities, and retailers to deliver MMS statements that have quantifiably reduced operating costs, improved collection metrics, maintained security and mitigated risk.

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