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The Un-banked / Self-banked Industry

What is the unbanked/self banked industry? What does this mean?

Over the past ten years, the United States has experienced the development and exponential growth of a unique consumer sector. According to multiple sources, this sector is most often defined as the unbanked (or self banked), underbanked, and underserved, with the number equating to approximately 83.7 million people in North America alone. These are consumers who, because of a variety of reasons, find themselves outside the mainstream financial services.

What is the typical profile of the unbanked (self banked)?

The unbanked come from all walks of life, and many work hourly, blue-collar jobs. One thing they have in common is that they typically fall into one of the categories below. Listed below are the most common factors that drive the unbanked and self banked:

• Culture — they may not use a bank because their parents didn’t use a bank or because their family has always operated with cash.
• Low income — they may have opted away from a traditional banking account because their income is low and they can not meet the monthly minimums required for free banking services or they may have poor credit and can not open an account.
• Regulatory barriers — they may be an immigrant, here in the US legally or illegally, but do not have the required identification or documents to open an account – or they may fear they will be watched by government officials or deported back to their native country.
• Time constraints — they are limited in time as they may be working multiple jobs and/or their lunch/dinner break may be 15 minutes or non-existent. This means that the availability of cash needs to be at their backdoor, maximizing their time and allowing them to be the most productive for their employer(s).
• Transportation dependencies — they may not have a driver’s license and therefore depend on others for transportation to and from work, to and from the bank, and to and from places to pay bills and/or to wire money.
• Poor education — their education level may be low and they may not understand how a bank operates and/or that their money is safe with a bank.