So you’ve heard me rail on about the unbanked and underbanked for the last couple of weeks and I’m not quite ready to let it go.  In addition to outlining the results of the FDIC study, I’d also like to give one final thought on what we as banks do about it.

There have been lots of programs to reach the unbanked and underbanked but all of those efforts have revolved around getting this group of consumers to open bank accounts.  Once you open a DDA, you can pay bills by check or through online banking, you have a debit card for ATM withdrawals and payments, and of course you have a safe place to hold your money.  But there is a problem…we’re always working from the base of a bank account.  Once you have the bank account, we make it easier to use all of the other services.

What if we approached the unbanked and underbanked from the opposite direction?  Instead of requiring the bank account, what if we offered the services on a fee basis?  This group is already paying transaction-based fees.  They’re comfortable with it.  What if we offered them what they are already buying from non-bank competitors, with the end goal that we someday move them to a bank account?  This addresses concerns on both sides – the bank gets more comfortable with the customer and their habits before opening the account and the customer has time to build up trust in the bank before committing.

Many banks have some fee-based services but there isn’t necessarily a guided philosophy around them and what they can mean to the bank in the long-term.  I’m not deluded enough that I think we can change philosophies tomorrow.  (Some of you may think I am but I promise I’m not!)  But why not consider it?  We certainly have a revenue hole to fill in 2010 so we can’t afford to dismiss these consumers.

A final note….I have really enjoyed contributing to Counting on Currency in 2009 and look forward to many more conversations with you in 2010.  Happy holidays and best wishes for a happy, healthy and prosperous 2010!S