A new report from the Federal Deposit Insurance Corporation (FDIC) shows that mobile banking can empower underserved customers to have greater control over their finances and ultimately open up access to mainstream banking.
FDIC released its report, “Opportunities for Mobile Financial Services to Engage Underserved Consumers,” on Wednesday (May 25) and it identifies the steps financial services companies can take in order to better meet the needs of the underserved consumer, based on qualitative research with both consumers and industry stakeholders.
Underserved households – those considered to be either unbanked or underbanked – typically do not have an account at an insured financial institution or if they do have an account, they utilize alternative nonbank financial services.
In a press release, the FDIC voiced its commitment to “expanding economic inclusion in the financial mainstream by ensuring that all Americans have access to safe, secure and affordable banking services.”
Households with access to an account at a federally insured institution can result in the ability to conduct basic financial transactions, save for emergency and long-term security needs, build a credit history, and access credit on fair and affordable terms, the agency added.
The FDIC’s study identifies seven core financial services that underserved consumers are in need of: control over finances, access to money, convenience, affordability, security, customer service, and long-term financial management.
Though mobile financial services should not be seen as a “cure-all” for the challenges and limitations facing underserved households, the report findings show that these services can provide an opportunity for banks to address many of the needs related to financial services that have yet to be met for the underserved.
The good news is that mobile banking usage is reportedly on the rise.
The Federal Reserve released the results of a survey back in March that showed 43 percent of adults used their phones for financial activities, a number that has steadily increased.
The number of survey respondents who said they use mobile banking features rose by 4 percentage points over the survey in 2014, The Wall Street Journal reported, showing that interest in capabilities like mobile payments and being able to check an account balance on the go have also increased among adults.