Financial institutions, including traditional banks and fintech companies, play a critical role in shaping an inclusive ecosystem for the unbanked and underbanked communities. Individuals in these groups often face significant barriers to accessing financial services, such as a lack of documentation, financial literacy or trust in financial institutions. However, financial institutions have a variety of tools at their disposal to foster a more inclusive environment.
Below, Forbes Finance Council members share 19 ways financial institutions can improve their inclusivity and ensure a positive financial journey for every customer. By creating tailored financial products and services that cater to the unique challenges these groups face, institutions can significantly reduce the barriers to banking and financial literacy.
1. Provide Personal Outreach And In-Person Communication
Forget sending emails or phone calls that are easily avoided. Go to where those not banked or underbanked are, speak to their problems and provide meaningful solutions. Nothing shows commitment and caring more than someone who is willing to put themselves forward and offer a helping hand. - Christopher Aliotta, Quantalytix
2. Build A Community
Financial institutions benefit in the long term by educating unbanked and underbanked customers. There are many traditional modes of education (newsletters, webinars and so on) but one of the most powerful methods is by building a community. In a community, customers learn from each other and build relationships. It also allows financial institutions to learn what's most important to their customers. - Alka Tandan, Gainsight
3. Design (And Prioritize) A Strategy To Support The Underbanked
Financial institutions seeking to support the underbanked should prioritize it in their strategy. Strategic R&D coupled with added resources are necessary to support and connect with the underbanked. Understanding the reasons behind banking avoidance is key. Let the research dictate the connection and financial education needed to overcome the underbanked consumer concerns. - Luke Billeri, Members Choice Credit Union
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4. Strive To Understand Your Customers
Creating an experience for a new segment of users requires a deep understanding of that group, its needs and its development curve, as well as products that can lift them sustainably for the banking institution. Many startups, such as Petal and Deserve, have done it well for millions of customers. A banking institution can try to build its own product or acquire one of these startups. - Ulvi Rashid, Ulvi Rashid
5. Determine The Reasons 'Why' People Are Unbanked Or Underbanked
It is always important to know your customers’ needs and expectations. The unbanked or underbanked are not fully banked due to some reasons. Fintechs and others must find out these reasons and properly position their products and solutions. For example, if price point or delivery options are major considerations, these need to be addressed to win their minds. Fix their concerns and win their wallets! - Ayo Adepoju, Ecobank Transnational Incorporated
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
6. Hire A Caring Team
Inclusive environments are created by staffing organizations with empathetic team members who bring similar life experiences or histories of financial struggle. The underbanked feel welcome and learn that they are not defined by their past. Work hard to build their trust in a brighter future. People plus tools plus products equals dignity and profits. - Greg Mitchell, First Tech Federal Credit Union
7. Take A Stance Against Restrictive Regulations
Financial institutions can advocate for the unbanked and underbanked by speaking out against regulations such as rate caps and bans on small-dollar credit that restrict access to creative financing solutions. To educate, they can be transparent and post their menus of products, rates and fees prominently in storefronts and online venues, like how fast-food restaurants post their menus. - Brian Slipka, True North Equity Partners
8. Offer An Easy-To-Use Digital Platform
Financial institutions can foster inclusivity by developing user-friendly digital platforms. To encourage a positive financial journey, they can focus on training employees to provide effective financial education directly to customers. This ensures that individuals with limited financial literacy can benefit from the services provided. - Richard Polgar, CFG Merchant Solutions & CapFlow Funding Group
9. Be Transparent
Inclusivity starts with measuring who receives loans. Banks should report their small business lending as required by Dodd-Frank 1071, which will track their diversity in small business loans. Many underbanked entrepreneurs go online for capital thinking it will be fairer. Fintechs should be transparent in their pricing so that borrowers have good info about their financing choices. - Carolina Martinez, CAMEO
10. Listen To The Needs Of The Underserved
Start by looking at your own work environment. Who do you have on your team and what is their lived experience? How much do they understand about the needs of those who are underserved? Take time to ask the right questions and truly listen. Most importantly, park your bias and don't assume. - Theodora Lau, Unconventional Ventures
11. Democratize Access
Develop intuitive, multilingual apps that offer financial education through interactive tools and real-life simulations. Platforms should provide personalized financial health assessments, enabling users to set and track goals. Integrate community-based features to foster peer support and share success stories, making financial education a collective journey. - Phil Davis, PhilStockWorld
12. Ensure You Have A Capable Team
It starts from within! Train your team. They are on the front lines when it comes to educating a borrower on potential finance options. It comes down to what the customer needs and not necessarily what they want. If your team is not trained correctly, this could result in a negative customer experience along with the customer being sold the wrong product to help them thrive. Train up! - Will Murphy, Everlasting Capital
13. Provide Low-Cost Options
Financial institutions can create inclusive environments by offering low-cost, accessible accounts with minimal fees, mobile banking for remote areas and multilingual support. Providing financial education through workshops, online resources and personalized advice can empower the unbanked and underbanked to manage their finances effectively, fostering a positive customer experience. - Gianluca Sidoti, The Wealth Company International FZCO
14. Host Personal Finance Classes
Financial literacy is a challenge today, especially for young professionals who were likely trained in college for a specific discipline but may not have taken a personal finance class. I see this as an opportunity for credit unions that already offer an alternative to the big banks. Classes during non-working hours in personal finance cost little to produce and can yield long-term client loyalty. - Todd Sixt, Strait & Sound Wealth Management LLC
15. Establish Partnerships
Financial institutions should partner with community organizations, government agencies and nonprofits to create an inclusive environment. Together, they can offer accessible services, financial literacy workshops, credit-building programs and affordable financial products, fostering a positive customer experience for the unbanked and underbanked. - Jeffrey Bartel, Hamptons Group, LLC
16. Offer Straight-Forward Options
Financial institutions can foster an inclusive environment by providing accessible digital banking services, cutting costs and simplifying account options. Financial education programs that support responsible borrowing, saving and budgeting geared toward the underbanked and unbanked should be given top priority. - Jared Weitz, United Capital Source Inc.
17. Focus On Bridging The Financial Gap
Offer low-cost options, easy account opening and clear fees. Partner with communities and educate them on budgeting, saving and credit. In Fintech, leverage mobile tech and alternative data. Remember, empathy and trust are key. By offering accessible and empowering financial tools, companies can pave the way for a more inclusive and prosperous future for all. - Parth Kulkarni, Adobe
18. Develop An Educational App
Pretty much everyone has a mobile phone. Mobiles are not just communication devices but technologically advanced tools that could be used to make financial education more accessible. Financial institutions should combat challenges in financial literacy by developing simple apps that include contextual financial education tips or gamification to encourage deeper learning and rewarding customer experiences. - Nick Chandi, Forwardly
19. Rebuild Trust
Many unbanked in the U.S., particularly Blacks and Hispanics, face historic discrimination and resource limitations. Financial institutions can change this narrative through community engagement, resource provision and culturally relevant financial literacy, including collaboration with influential leaders in those communities. - Maria Puche, Wealth Armor
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
