Who are the underbanked?

Pamela Yip of the Dallas News had a very good article about the underbanked. According to Yip, The Center for Financial Services Innovation recently released the results of its study that attempts to more closely define who are the underbanked.

According to Yip, they fall into 8 categories.

•“Cash Is King” – These consumers are most likely to rely on cash for their financial transactions and are the least likely to have bank accounts. They have much lower household incomes than other segments and are more apt to be struggling to make ends meet.

•”The Next Wave” –Consumers in this segment are trying their best to make ends meet and hope to reach financial goals, such as owning a home. Cash plays an important role for them. They want to save money and are interested in earning interest but are still less likely to have banking relationships.

•”The Strivers” – Strivers take an active role in their money management. They’re active users of bank accounts and engage in many financial transactions. But some strivers don’t have checking accounts, citing privacy concerns.

•”Middle of the Road” – Middle of the Road adults are also active financial money managers. Most have bank accounts.

They are less likely to have come from families who have banked. They’re most likely to make their financial transactions in a stand-alone bank or credit union because they find the employees most friendly and helpful.

•”My Way” – Members of this group are more likely than other groups to have a bank account. But they make frequent bank and nonbank transactions at various places – including convenience stores. They want convenience. And they’re leery of hidden fees or high minimum balances.

•”The Savers” – As the name implies, saving money is their key reason to have bank accounts. Keeping money secure is also a key reason for these accounts. They make frequent transactions at nonbank places like supermarkets, convenience stores and discount/dollar stores.

•”Almost There” –These consumers are more likely than others to be part of traditional financial institutions and are more comfortable making transactions in a bank/credit union than nonbank settings. They prefer banks or credit unions that are contained within a store rather than stand-alone buildings.

•”Borrowers” – These consumers borrow money frequently. They have had student loans, personal loans, lines of credit, home equity loans, payday loans, and auto loans – all at higher rates than the average adult. They still make transactions at supermarkets and convenience stores but most have bank accounts.

The underbanked study is very good information for lead buyers and sellers attempting to increase their ROI’s.. According to Yip, there are  40 million underbanked households . For Internet marketers, this may be an incredible long-term opportunity to assist these important, and underserved customers.