Helping the underserved and unbanked

“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.