The underbanked are educated and employed but are reluctant to use traditional banking products such as debit / credit cards, short term loans, etc., primarily due to the fear of hidden costs and convenience issues.
Dallas, TX -- (SBWIRE) -- 05/11/2010 -- The unbanked and the underbanked together spend around $10.4 billion on more than 324 million alternate financial services (AFS) products. This is due to lack of knowledge on part of the banks to target and market banking products to the underserved. Economic inclusion of the underbanked population (approximately 43 million in 2009) into the traditional banking cycle will have a significant financial impact on the federally insured banks that have traditionally stayed out of this market. Wooing the Underbanked – Need, Behavior and Attitude Analysis is a market research study designed specifically to profile underbanked populace/households. The aim of this report is to analyze various reasons behind the low adoption of banking products by underbanked and their preference for alternate financial services (AFS) and products (transaction/credit).
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The underbanked are educated and employed but are reluctant to use traditional banking products such as debit / credit cards, short term loans, etc., primarily due to the fear of hidden costs and convenience issues. They make little use of the services provided by the mainstream financial institutions; their use is limited to traditional banking wherein they usually have a checking / savings account. They also frequently use AFS offered by non-banking institutions. The AFS products are non-bank money orders, payday lending, check cashing facilities, rent-to-own agreements and refund anticipation loans.
The objective of the report is to provide vital marketing information about the underbanked that also use AFS products; and the traditional and novel banking and financial services that can be rendered to them by the banks. The report will provide new insights and give recommendations for banks intending to capitalize on this untapped market segment. Intensive bifurcation of the underbanked customers on the lines of income, age, education, region, race, etc. will enable product development and provide a roadmap to the future of novel banking practices for the underbanked.
Scope of the report
• Strategy Formulation – Market definition, industry overview, market size, key drivers, and issues to wooing the underbanked - inconvenience, location, cost and credit history
• Customer Needs and Attitudes
• Business Models – Go-to-market strategies, how to reach the underbanked and with what products, pricing strategies, competitive pricing strategy, risk factors, underwriting and collections
• Vendor Analysis – Products and services designed for the underbanked
Analyst Briefing Presentation on Wooing the Underbanked – Need, Behavior and Attitude to be held on 1st June 2010.
The Banking and Financial Services practice at MarketsandMarkets is pleased to announce its Analyst Briefing Presentation on Wooing the Underbanked – Need, Behavior and Attitude to be held on 1st June 2010. The briefing on wooing the Underbanked - Need, Behavior and Attitude Analysis will benefit banks, non-banks and transaction processors.
Table of contents
1. Executive summary
2. Introduction
2.1. Report purpose
2.1.1. Report catalyst
2.2. Report structure
3. Research objectives
4. Study methodology and sample
5. Strategy formulation
5.1. Market definition
5.1.1. Industry overview
5.1.1.1. The underbanked defined
5.1.1.2. Distinguishing between the underbanked and the unbanked
5.2. Market size
5.2.1. Underbanked households
5.2.1.1. Demographic characteristics of underbanked households
5.2.1.1.1. Underbanked households by race, ethnicity, language usage, nativity and citizenship
5.2.1.1.2. Underbanked households by household type
5.2.1.1.2.1. Married couple family, unmarried female family, unmarried male family and non-family household
5.2.1.1.3. Underbanked households by income, education, and age
5.2.1.2. Geographic variation in the percentages of underbanked households by region, state, and Metropolitan Statistical Areas (MSA)
5.2.1.2.1. Underbanked households by region and state
5.2.1.2.2. Underbanked Households in urban/rural areas and the 20 most populated MSAs
5.2.2. Product Set used by the Underbanked
5.2.2.1. Standard banking products
5.2.2.1.1. Checking, savings, loans, credit/debit cards
5.2.2.2. The use of cash
5.2.2.3. Alternative Financial Services (AFS)
5.2.2.3.1. AFS used by Underbanked Households
5.2.2.3.1.1. Types of AFS Used by Underbanked Households: Transaction and Credit Products
5.2.2.3.1.2. Specific AFS Products Used by Underbanked Households
5.2.2.3.1.2.1. Underbanked Households’ Use of Specific Transaction AFS: Non-Bank Money Orders and Non-Bank Check Cashing
5.2.2.3.1.3. Underbanked Households’ Use of Specific AFS Credit Products: Payday Lending, Pawn Shop Borrowing, RTO, and RALs
5.2.2.4. Prepaid cards
5.3. Challenges in wooing the underbanked
5.3.1. Inconvenience
5.3.1.1. Location
5.3.1.2. Urgency of need
5.3.1.3. Language
5.3.1.4. Small amount of transaction
5.3.2. Cost
5.3.3. Credit history
5.4. Key Drivers
5.4.1. Significant market strength/ volume of financial transactions of the underbanked / underserved
5.4.2. Easier to tap into the underbanked market compared to the unbanked since the former already have bank accounts
5.4.3. Opportunity of cross sell and up sell to those who already have an account with the bank
5.4.4. Overall high cost of Alternative Financial Services (AFS) products
5.4.5. Federally secured nature of banks make them more reliable and secure
5.5. Key Opportunities
5.5.1. Growth of Minorities
5.5.2. Strategic partnerships with Non-banking Financial Companies
5.6. Key Restraints
5.6.1. Profitability issues
5.6.2. Regulatory issues
5.6.3. Low credit score of underbanked
5.6.4. Stiff competition from the AFS sector
6. Business Models
6.1. Go-to-market strategies
6.1.1. Strategy to approach the underbanked
6.1.2. Product offerings
6.2. Pricing strategies
6.3. Risk factors
7. Vendor
7.1. Vendor Profiles
7.1.1. Fidelity National Information (FIS)
7.1.2. First Data
7.1.3. eCommLink
7.1.4. Total System Services (TSYS)
7.1.5. FSV Payment Systems
7.1.6. TxVia
7.1.7. Green Dot
7.1.8. NetSpend
7.1.9. InComm
7.1.10. I2C
7.2. Vendor Benchmarking
7.2.1. Functional benchmarking
7.2.1.1. Transaction updates through mobile
7.2.1.2. Risk Management
7.2.1.3. Customer Information System
7.2.2. Operational benchmarking
7.2.2.1. Breadth of reload networks
7.2.2.2. Tie ups with ATM networks
7.2.2.3. Breadth of prepaid card programs in offering
7.2.3. Commercial benchmarking
7.2.3.1. Initial Cost of processing
7.2.3.2. Cost of transactions
To register for this briefing, please click here
http://www.marketsandmarkets.com/AnalystBriefing/wooing-underbanked.asp
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