ABA Banking Journal - September 2007 - (Page 28)
COVER STORY Meeting the challenge Banks find ways to serve the unserved by breaking out of conventional thinking oliticians and pundits love big concepts wrapped in short labels—issues in icons—hence the adoption of the term “unbanked.” In eight little letters, one can put oneself on the side of all kinds of people—estimated to number anywhere from 12 million to 40 million or more—and put oneself at their service. But what if such thinking does them all a disservice? To Jennifer Tescher, the word “unbanked” is amorphous. Tescher, director of The Center for Financial Services Innovation, and her staff work extensively with banks and other financial services providers, including Wal-Mart. (Earlier this year the giant retailer announced a massive expansion of its check cashing and related services.) One of the key points Tescher makes is that serving the “unbanked” is not like serving the mass market. The truth about the “unbanked,” and its cousin the “underbanked,” is that they represent not a market, but a group of niche markets that need niche products, says Tescher. On the one hand, there are many people who would like to have bank accounts. On the other hand, some people who don’t deal with Entire report by Steve Cocheo, executive editor 28 SEPTEMBER 2007/ABA BANKING JOURNAL P banks now don’t want to, says Tescher. Research conducted by the center, which is a nonprofit affiliate of community development institution ShoreBank Corp., Chicago, has found some segments that are perfectly happy with check cashing and transacting by money order and other nonchecking means. (See the digital edition for in-depth coverage of this research and additional insights from Tescher—www.ababj.com.) “At the core,” Tescher continues, “it’s all about understanding the customers and giving them what they want.” ABA’s James Ballentine agrees. “There is no single ‘Eureka!’ product out there” to meet the needs of all, he says. Ballentine, director, grassroots and community outreach, says the supercategory of “unbanked” comes loaded with numerous sub-categories. Among them: the unbanked immigrant markets; the unbanked who think they are unwanted by mainstream institutions, feeling that way due to perceptions of prejudice; the unbanked who think they don’t fit due to the level or source of income; and the unbanked who are unbanked because they have income and assets they need to hide, for numerous reasons. Furthermore, these people and others lumped into the unbanked market overlap among categories, and further sub-niches arise by age and other demographics. www.ababj.com/subscribe.html
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