It’s no secret that, especially since the recession, many American households are managing their finances without traditional bank accounts. According to the FDIC’s most recent survey of American households, nearly a third of American households are “unbanked” or “underbanked.”
Here’s how the FDIC defines these terms.
- Unbanked households have neither a checking account nor a savings account.
- Underbanked households have one of these types of accounts, but they rely on primarily on non-traditional financial products, such as pre-paid cards and check-cashing services, for managing finances.
About 8% of American households are unbanked. A little over 20% are underbanked.
Together, these types of households represent a large potential market for banks and credit unions. What’s stopping these institutions from serving these communities?
When the FDIC asked that question in a survey of U.S. banks, the leading answers were identity verification and fair-lending compliance.
At Dragnet Solutions, we’re working hard to deliver account-screening and document-authentication solutions for banks and credit unions to help eliminate these obstacles.
To learn more, please read our white paper on serving the underbanked.