Even in the face of the economic hardships that came with COVID-19, America’s unbanked dropped to around 4% last year.
That’s according to the Federal Deposit Insurance Corporation’s (FDIC) 2021 National Survey of Unbanked and Underbanked Households, released Tuesday (Oct. 25). It found that about 4.5% of U.S. households — or 5.9 million — lacked an account with a bank or credit union.
That’s the lowest unbanked rate for the country since the FDIC began conducting the survey in 2009, the agency said in a news release.
FDIC Acting Chairman Martin J. Gruenberg said the results of the survey “highlight the importance of ensuring consumers who are receiving benefits or starting a new job, two key bankable moments, can easily find and open a bank account that meets their needs.”
The survey found that roughly 1.2 million more households became banked since 2019. Among these households, about half of them who received government payments said those payments led them to open a bank or credit union account.
In addition, the survey showed that the use of mobile banking rose “sharply” among banked households between 2017 and 2021, increasing from 15.1% to 43.5% during those years and “was the most prevalent primary method of account access.”
That’s in keeping with the findings in PYMNTS Digital Banking Tracker, which found that a little more than three-quarters of Americans used their banks’ mobile apps last year for everyday banking tasks, such as depositing checks or viewing statements.
The study — done in collaboration with NCR — also found that 70% of consumers said their increased use of digital banking was permanent, even as pandemic restrictions faded.
Meanwhile, 14.1% of households (or 18.7 million households), were underbanked last year, the FDIC said. That means they had an account with a bank or credit union account but also turned to nonbank financial products and services.
PYMNTS remarked on this trend last year, noting that FinTech players such as PayPal, Chime, Cash App, Venmo and Money Lion were offering “bank-like services” for consumers, without the costs and concerns of signing on with an actual bank.
In addition, mainstream U.S. banks such as PNC began competing for businesses among the unbanked/underbanked, helping them participate in an increasingly cash-free digital economy.