“There is a hugely underserved population out there...
those who are the least capable of paying, pay the highest.”
-
James Cameron
This fact is almost an
epidemic in our country and the financial system is less prepared and equipped
than ever to handle the basic needs of the underserved and unbanked. Key underserved populations include:
- Limited education
- Seniors
- Youth
- People with disabilities
- Immigrants
For many, breaking the molds
of stereotypical perceptions of underserved and unbanked is a fundamental
initial step. We are not necessarily
talking about the poor, the uneducated or non-credit worthy. We are talking, typically, the
uninformed. They simply may not or do
not know of better, more financial advantageous options.
“You can’t rent a hotel room, rent a car, or buy
online without a credit or debit card,” says Simon. “You’re really left out of
the commerce system.”
In my opinion there is a
four-step process that your credit union can undertake to begin providing
service to underserved and unbanked individuals and families.
1) Identification
The start to any underserved
process is the identification of just what exactly is an “underserved” and how
will my staff know? The initial place to
start is within your own membership ranks.
You might be quite surprised how many of your own members simply do not
know the products and services available to them and seek out other sources
when a financial need arises. There are, of course, low-income designation
areas and empowerment zones that clearly identify the targeted populations and
other governmental and community resources that are beacons for
assistance. The fundamental point is to
get started small and grow from there.
2) Engagement
Once you identify groups,
areas, or concentrations of underserved households, the next step is
engagement. The importance of
“community” and providing a sense of belonging can be a critical element to
your success is serving the underserved.
Putting staff “feet on the street” in terms of reaching out to community
groups and letting people know of programs in place, educational assistance,
etc. is a powerful beginning. Look for
partnerships with churches, family-centric groups (like the “Y”) and other
opportunities engage larger groups more quickly.
3) Integration
Integrating your underserved
process into your “normal” banking process will ensure you do not simply start
a “promotion” of helping the underserved, but truly change your business
practices and those that you are able to attract. Another key to serving the underserved is
lowering service and access hurdles.
Offering items like pre-paid cards, programs like “Paycheck Accept”,
offering micro-finance options and creating specialized products may help. One credit union created a “citizenship loan”
to help cover the costs of applying for US citizenship.
4) Sustainability
Serving the underserved takes
a commitment from the boardroom to the branch teller line and across all lines
of member contact. Creating a process that becomes part of “what and how” you
do versus a campaign, creates a sustain impact to your community and
opportunity for your credit union. Make
sure you create your process to ensure sustainability and repeatability across
different locations, subgroups and markets.
In summary…there is
significant opportunity to “do good by doing good” and identify, engaging,
integrating and sustaining a serving the underserved process.
Cheers!
EPL Staff
EPL, Inc.
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