The percentage of unbanked households in the US is on the decline, with employment and income levels rising, and with the economy rebounding from the Great Recession, according to a new survey from the FDIC and the US Census Bureau. The survey found that 7.7% of US households are unbanked, down from 8.2% in 2011, the last year the survey was conducted. The study directly attributed the decline to an increase in employment and income levels among those surveyed compared to 2011.
While the unbanked households are decreasing, those that are underbanked (that have a bank account but still use alternative financial services providers) remained steady since 2011 at 20%. The study found that nearly one in four households had used an alternative financial services provider (such as a check cashing or payday loan provider) in the last 12 months.
Unbanked and underbanked households also make up the majority of prepaid card users. The survey found that 66% of the respondents who had used a prepaid card in the last 30 days fell into those two categories. Nearly 80% of households that used a prepaid card in the last 12 months used it to pay for everyday bills and purchases.
Unbanked households are the fastest growing segment for prepaid cards, the survey found. The percentage of unbanked households that had previously used a prepaid card jumped from 17% in 2011 to 27% in 2013. Prepaid card products could offer an opportunity to draw unbanked households into the banking system, the FDIC concluded.
The survey also examined use of different banking channels for the first time. Underbanked households favored mobile banking more than fully banked ones: 32% of underbanked households said mobile was their primary banking channel, compared to just 21% of fully banked households. But households that cited mobile as their main banking channel also used a median of three other channels (such as ATMs or tellers), according to the study.
[For more on mobile and underbanked consumers, check out: How to Reach the Underbanked With Mobile Check Deposit.]
Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio