Based on Phase 5 research findings, NYPAY (New York's leading forum for innovators and leaders in payments and mobile commerce) has a new blog post focused on the "underbanked", i.e. those consumers who have limited access to mainstream financial services. Writers Ron Mazursky and Madeline K. Aufseeser note that the "Underbanked <have been> Harder Hit by COVID-19", reporting lower comfort levels with digital servicing options combined with greater pessimism about their financial future in general.
Research for the article was based on data from the Phase 5 study, "Impact of COVID-19 on Consumer Financial Services in the US" (released September 2020) as well as the related presentation "COVID and the Changing Financial Consumer". The study compared behaviors and attitudes of respondents with only a checking or savings account to that of respondents with multiple products such as credit cards, loans, and investments.
At the time of the study, mobile and online banking services were new to almost twice as many of the underbanked respondents vs. other consumers. The underbanked group also demonstrated 2x greater concerns with everyday financial needs including daily expenses, rent, and bill payments. Furthermore, over a third of the underbanked group reported expectations that their post-pandemic spending will decrease further, as compared to less than a quarter of all other respondents.
So what does this mean for FIs? Mazursky and Aufseeser suggest first of all identifying "the best approaches to reach the underbanked", as well as "which day-to-day banking needs <are> not being met" in order to take advantage of this business opportunity.
To further investigate the needs of your underbanked customer segment, contact us.