Underbanked Accounts Represent Huge Opportunity, Report Says
A new report from the Center for Financial Services Innovation and Core Innovation Capital asserts that consumers with minimal relationship with financial institutions nonetheless generated roughly $45 billion in fee and interest income in 2010.
The organizations also estimated the total underserved market in the U.S. was worth $455 billion in 2010.
CFSI is the leading financial service think tank specializing in issues around the unbanked and underbanked populations. CIC said it is the only venture capital fund that invests exclusively in technology companies that serve unbanked and underbanked consumers.
The firms said the 2010 market volume figure includes principal borrowed, dollars transacted and deposits held.
The firms also reported that Internet-based payday lending grew by 35% between 2009 and 2010, while general purpose prepaid card business grew by 33% and payroll cards by 25%.
"This new data confirms that there is a large opportunity for the financial services industry to create products and services that are both profitable for them and provide much needed solutions for this consumer segment" said Arjan Schütte, managing partner at CIC. "Our vision is to transform this market in a way that is significantly more profitable to the industry, will save consumers billions of dollars and help create upward mobility for tens of millions."