CHICAGO — Underbanked and lower income consumers and communities want convenience and low prices just like mainstream consumers do, but a recent study found that they also want intangible things like greater trust and a personal connection that credit unions may be better positioned to offer.

The Power of Experience In Understanding the Underbanked Market, which has been released by the Center for Financial Services Innovation, found that underbanked consumers make financial decisions differently than mass market customers, strongly emphasizing intangibles such as respect, trust, safety, security, and a sense of belonging, CFSI said.

The study also found that underserved consumers cash an average of 20 checks per year and that these have an average check size of $452. Most of them want to have a relationship with a credit union or bank. More than 60% have a checking account and 45% have a savings account and between a third and almost half of those who do not have these sorts of accounts would like to have them.

The study surveyed nearly 760 check-cashing customers across the United States, using both qualitative and quantitative techniques, CFSI explained. The study took in traditional quantitative information included the needs, desire for products and services, attitudes, and other dimensions, while the qualitative information sought to describe the nature of the experience different types of underbanked consumers want from a financial

institution and the decision processes that prevail, the organization added.

The study found that while underbanked consumers are "often" confused by financial institution policies, they put a great deal of trust in what the study called the "informal economy" which it defined as "a trusted network of friends, family and community members, including check cashers." This suggested that credit unions seeking to reach out to lower income populations should strive to make sure that the same staff members are involved in that effort consistently so that lower income members and communities can have the chance to build up the personal trust they need.

According to the study, physical surroundings matter to underbanked consumers. Many people are uncomfortable in an institutional setting and would prefer a less formal environment, CFSI said. Safety and confidentiality are important too, the study found.

Underbanked consumers also put a high degree of importance on respect and understanding, the study found. Things like convenient locations and hours can show that the credit union has both listened to their needs and respects them. Credit union employees can be encouraged to clearly communicate policies about charges and responsibilities, the study said.

The study also found that more financial institutions need to break out of only offering the traditionally

mainstream financial services. Lower income and underbanked consumers may eventually become consumers of those products, but may also be better served right

now by check cashing, money orders and low-cost remittances, for example.

Finally, educational outreach to lower income and underbanked consumers may be are interested in learning about financial matters but may not have time for traditional classes. Experiential learning, online courses and peer coaching might be alternatives that need to be explored, the study suggested.

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