This report analyzes the retail financial services activities and the macro and micro economic trends that have resulted in the percentage of households that are unbanked to rise for the first time since the Federal government began tracking consumer banking relationships. It also provides detailed demographic portraits of both underbanked and unbanked consumers while diving deeply into their financial behaviors and consumer psychographics.
Underbanked and Unbanked Consumers in the U.S.: Successfully Targeting Consumers of Alternative Financial Services
1. Underbanked and Unbanked Consumers in the U.S.: Successfully Targeting
Consumers of Alternative Financial Services
Published: July 2011
No. of Pages: 167
Price: $ 3750
Underbanked and Unbanked Consumers in the U.S. provides market size, industry and
product revenue forecasts and analyzes the legislative and regulatory challenges driving the
growth of alternative financial services (AFS). Increasingly, these products are seen as a
viable alternative to banks by the 26% of U.S. households that are underbanked or
unbanked.
This report U.S. Consumers Market analyzes the retail financial services activities and the
macro and micro economic trends that have resulted in the percentage of households that
are unbanked to rise for the first time since the Federal government began tracking
consumer banking relationships. It also provides detailed demographic portraits of both
underbanked and unbanked consumers while diving deeply into their financial behaviors and
consumer psychographics. These consumers, buffeted by both the economy and the profit
maximization strategies of retail banks, have been prime targets of non-traditional financial
services providers offering transparent pricing, convenient retail locations and bespoke
products that can be used according to the consumers’ needs and preferences.
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The report examines the efforts of banks and non-banks to market to underbanked and
unbanked consumers and provides analysis of AFS pure-play and retailer product
introductions, feature enhancements and pricing strategies.
The report also delves deeply into AFS initiatives in international markets and focuses on
the technologies, new products, marketing and branch-level strategies realizing success
abroad and transforming vendors and institutions into must-knowns to U.S. bank
executives, AFS strategists and industry regulators.
2. Underbanked and Unbanked Consumers in the U.S. presents historical data and 5-year
revenue forecasts for the alternative financial services market and each major AFS product:
Prepaid cards, remittances, money orders, check cashing and payday lending. We anticipate
those revenues increasing from $338 billion in 2010 to $520 billion in 2015.
About the Author: Elizabeth Rowe was the Group Director of Banking Advisory Services at
Mercator Advisory Group, a banking and payments consultancy. Previously, she was the
senior banking consultant at Guideline, Inc., a consultancy/business advisory firm. For the
past 17 years, she has worked with the nation's largest banks, retailers and solutions
providers as they assess emerging consumer, technological, regulatory and competitive
challenges, trends and opportunities. She has taught at the ABA School of Bank Card
Management and frequently speaks at industry, federal regulator and client conferences.
She has been widely quoted in the financial press including The Economist, The Wall Street
Journal, American Banker, Forbes, Independent Banker and CNN.
TABLE OF CONTENTS
Chapter1:ExecutiveSummary
ScopeandMethodology
ReportMethodology
CharacteristicsofUnderbankedandUnbankedConsumers
WhoAretheUnbanked?
WhichUnbankedHouseholdsCanBecomeBanked?
WhyDon’tUnbankedHaveaBankAccount?
TheGrowingRanksoftheUnbanked
WhoAretheUnderbanked?
SpottingtheUnderbanked
BabyBoomersandSeniorsHeavilyRepresentedAmongUnderbanked
AlternativeFinancialServicesProductsUsedbyUnderbanked
BankingIndustryTrendsDrovetheGrowthintheNumberofUnderbankedHouseholds?
StateoftheEconomyIsGrowingtheRanksoftheUnderbanked
EconomicPressuresonWorkingAmericansHaveIncreased
Long-TermUnemployment
HealthInsuranceCostsAreRising
Bankruptcy
Foreclosures
DecliningRealIncomes
NumberofAmericansLivingPaycheck-to-PaycheckIncreases53%
TheOverallU.S.Economy-2011andBeyond
BanksTargetingtheUnderbanked/Unbanked
ProductsBanksCanMarkettoUnderbankedandUnbankedConsumers
BB&TLinksItsPhysicalFootprintWithPrepaidCard
LargeU.S.RetailBanksOfferMoreLocationsthanRetailers
BanksTackleSmallDollarLoans
EveninProgramsTargetingUnderbankedorUnbanked,BankersDeterminedtoBuildTraditionalBan
kingRelationshipswithParticipants