Three ways banking innovation can help better reach the unbanked
Nearly 15% of adults were underbanked in 2023, according to the FDIC, a number that has grown since 2020. Combined with 5% of completely unbanked adults, one out of five adults in the United States are not receiving all the services they need from their financial institution. Here are three ways that banking innovation strategies can help community banks and credit unions reach those people.
Deploy video banking in low-access or high-risk communities
This is exactly what Five County Credit Union did in their attempt to reach underbanked people within their communities. Through video banking technology, FIs can centralize their staff, enabling them to put branches in high schools or grocery stores without having to staff them. Five County has a fully functioning branch without a single staff member. Video banking innovation strategies not only helped Five County better utilize its existing staff, but it helped reach low-access communities.
While mobile banking has risen, bank teller usage remains prevalent for some demographics who don't have smartphones, Wi-Fi, or even unlimited data phone plans. These include expected groups, such as older generations, as well as higher-risk groups like low-income or less-educated households. FIs can provide bank teller access without building lavish branches through banking innovation strategies like video banking.
“We want to help our members, no matter where they are or what their situation is.”
Dan Leeman, AVP of Service Center –– Five County Credit Union
Emphasize financial literacy
Building on the last point, another great usage of video banking technology is for financial literacy. One Invo client has a branch inside of a high school. In 2022, a report by Thunes found that 62% of Gen Z don't have a bank account. 90% of Gen Z uses social media multiple times per day and more than 2/3 say they have purchased items they first saw on a social media platform.
In other words, many young people are seeing financial literacy replaced with social trends. For the 20% living in an underbanked or unbanked home, they may not have any real-life role models for traditional banking options. Having video branches in high schools and colleges is not only a way to help underbanked people get the services they need, but a way to improve financial literacy in the community.
Make the banking experience seamless and easy for everybody
The reality is that most unbanked or underbanked people fall through the cracks. When considering new technology options or innovation strategies, financial institutions must consider how those strategies can be leveraged to reach unbanked and underbanked people.
Community banks and credit unions can reach hard-to-reach demographics by prioritizing them with things like financial literacy programs or technology like video banking. In other words, bank where your community can find you, and deploy technology that is meant to find them.
Do you want to learn more about how Invo can help your financial institution reach the unbanked? Schedule a meeting with a rep or request more information today.