Mobile Solutions Can Assist Underbanked Consumers
According to a report from the Federal Reserve Bank of Boston, innovative mobile banking features can help underserved consumers obtain safe, secure and convenient options that foster financial inclusion.
The Boston Fed found that many prepaid card programs now offer mobile banking-like features that were once only available to traditional banking customers. It said these features can provide more ways for the underserved to conveniently conduct transactions, as well as greater control over their money.
The Boston Fed’s report cited a 2012 FDIC report that said more than 28 percent of U.S. households conducted some or all of their financial transactions outside of the mainstream banking system, 8.2 percent of households are unbanked and 20.1 percent are underbanked. At the same time, 90 percent of the underbanked had mobile phones, 56 percent of which were smartphones. Of these, 49 percent were using mobile banking services in the past 12 months, and more than 30 percent were using mobile payments.
The report concluded that there is significant potential for mobile financial services to improve the financial health of underserved consumers. The Boston Fed called for educating the regulatory community on the value of mobile financial services for the underserved to foster the creation of rules that would promote the development of innovative mobile products.
