Don't Forget About the Under-Banked Consumer

August 10, 2011
The Hill 
overdraft news

Drew Edwards, CEO and founder of Chexar Networks, Inc., says in this blog posting that banks historically have been unwilling to change their product offerings to meet the legitimate needs of the underbanked -- a massive consumer group -- by adding services such as check cashing, money transfers, walk-up bill payments, and prepaid Visa/MasterCard debit cards. Now, banks are growing more and more focused on redefining their product set to meet the needs of these consumers by offering them the services they are purchasing today at the corner check casher or store. This change in mentality has been driven by recent legislative changes in Washington that will significantly lower the fee income these banks generate from deposit accounts, debit cards, and credit cards. Forced to re-examine their fee income models, banks have spent the past year performing internal analysis that has helped them to realize that as much as 25 percent of their current deposit account holders are actually going outside the bank to procure these services.
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