Opportunity

 

 

A large and emerging market The underbanked are consumers with a checking or savings account at bank or credit union but with less than average use/access to other basic banking products such as credit cards/loans and savings accounts. Underbanked consumers conduct some of their financial transactions outside of the mainstream banking system — defined as retail banks, savings and loans and credit unions. They use a combination of traditional bank products and alternative financial services. The FDIC defines them as those who have used alternative financial services (AFS) in the past 12 months. In the U.S. 20.1 percent of households are underbanked. This represents 24 million actual households with 51 million adults. 29.3 percent of households do not have a savings account, while about 10 percent do not have a checking account.1 This is in contrast to about two-thirds of “banked” American households that have both checking and savings accounts. In the last year, one-quarter of households have used at least one AFS product, and almost one in 10 households has used two or more types of AFS products. The underbanked market is large and growing in the United States. Demographic and societal trends will continue to fuel this segment of the consumer financial service landscape and will present challenges and opportunities to financial service providers for years to come.

UNDERBANKED MARKET: LARGE AND GROWING Percentages Based on 120 Million U.S. Households

DEFINITIONS: Unbanked: Consumers without a checking or savings account at a bank or credit union and are considered to be outside the mainstream financial system. They rely almost entirely on the use of cash and Alternative Financial Services.

Underbanked: Consumer with a checking or savings account at bank or credit union but with less than average use/access to other basic banking products such as credit cards/loans and savings accounts. The FDIC defines them as those who have used alternative financial services (AFS) in the past 12 months. They use a combination of traditional bank products and alternative financial services.

Beasley Financial Group’s Redistribution of Wealth financial ecosystem is poised to capture a portion of the aforementioned markets.