A strange but true fact: in the US, there are still thousands of people without bank accounts or who are critically under-banked. Some are immigrants who have not yet got comfortable with local financial institutions, some are from low-income families who have never had much truck with banks. Underbanked populations come from many walks of life but they all generally have one thing in common: They have jobs.
As a financial institution hoping to reach underbanked populations, it’s often necessary to get creative in your outreach methods. Offering banking through schools and educational programs, getting customers involved when they apply for personal loans, and providing community financial services are all great places to start. But one under-explored option is to work directly with the employers of underbanked populations.
The Goal of Underbanked Outreach
Your goal as a financial institution is to encourage underbanked populations to open customer accounts, store money in interest-bearing savings accounts, and start building readable credit scores. To do this, first you need to get everyone onboard with the idea of having a bank account. And the easiest way to do this is through wages.
No matter why a person is underbanked, in the US, pretty much everyone has to work. And formal wages must be paid in a regulated way. Most employers prefer to deposit wages directly into a bank account rather than handing out printed cheques, and as a financial institution, you can help make this happen.
Providing Wage-Pay Bank Accounts Through Employers
The first step is to reach out to the employers in your targeted populations. You know your population better than we do, and who employs the most underbanked staff in the area. Get in touch with these employers and discuss offering a program to their employees that will provide free bank accounts for staff to receive and manage their wages.
The local companies can offer your bank account program as an employment perk, helping their underbanked staff integrate more fully and conveniently with today’s digital financial world. These accounts should function like your normal customer accounts with a greater emphasis on security, assistance, and full-funnel leads to additional financial services.
Making Accounts Convenient for Underbanked Account Holders
The next step is to ensure that your targeted populations will find the accounts both appealing and useful. Your goal is to introduce the new account-holders to the joys of online full-service banking. Convenient mobile and online account management, bill pay automation, and your other appealing features are all candidates for your special wage-account services.
Be sure to automatically pair an interest-bearing savings account to each checking account and offer options to help your new underbanked customers save up month by month for special goals. The more friendly and easy to use your accounts are, the more people will start managing all their finances through your bank. The more your banking apps introduce helpful features and bonuses, the more popular adoption will become.
Offer Rewards for Using the Accounts
To help new customers who are not yet comfortable with online banking, add gamification features that reward account holders for using their accounts. Consider providing cashback or local store coupons, savings goal bonuses, or unlocking financial services based on how much a person puts their account and new bank cards to use.
Provide Options to Open a Credit Card
The initial account should include checking, savings, and any bonus features that make your mobile banking stand out. However, as many of your new customers become familiar with online banking, they will also become interested in owning a credit card managed through the same account. This is fantastic news for you, as your customers are willing to start building their credit score without overt encouragement.
All you need to do is make a credit card easy and safe to open from these wage-based accounts. Consider creating a special safety-card offer with a low initial limit and the ability to earn a progressively higher limit through responsible card use and bank reward points.
Employer Account Break-Away
Finally, be sure that your customers’ accounts are not permanently tied to a single employer; merely provided by their employer and used to manage wages. This way, when new customers move on to a new job, they keep the account and continue to manage their finances through your bank.
By offering bank accounts through the employers of underbanked populations, you can reach responsible wage-earning adults and introduce them to the joys of online banking in a safe and encouraging way. The employers themselves encourage staff to open bank accounts so that wages can be transferred electronically.
And from there, underbanked professionals are welcome to start enjoying the ease and freedom of having a debit card, making quick in-person and online payments, growing interest on their savings, and eventually opening their own credit card. Not to mention all the perks of being a customer of your financial institution,
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