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The very customer banks should be looking to for future loan and deposit growth receives more solicitations from AT&T or Sprint than she receives from her own bank.
August 22 -
The meaning of the term "underbanked" has evolved considerably over the last 30 years, and its definition today makes little sense.
August 20 -
Consumers deserve the kinds of high quality, widely accessible savings, credit and payments products and experiences that are critical ingredients in the recipe for financial health.
August 26
A remarkable
Young adults and Americans making $30,000 or less in household income two groups especially likely to be financially underserved use social media significantly more than Americans as a whole, as the
As a result, a growing industry is emerging to provide these consumers the highly networked but underbanked with the ability to leverage mobile and social media to build savings, manage money, and build a record of creditworthiness. According to the recent report, "
The opportunity is large and growing. As highlighted in the annual
So how are mobile technology, social networks, and big data helping the underbanked consumer access higher quality financial services?
Financially underserved consumers already generate data that illuminate their financial prospects, and creative startups are finding ways to leverage that data to offer better financial products. These startups are exemplified by companies like
Social networks and big data are leading to solutions not just for underbanked consumers but for small businesses as well. For example,
Of course, when it comes to weaving social media and big data features into financial services, there are potential issues that should be taken into account. Innovators harnessing big data can seek to minimize regulatory and reputational risk by making it a priority to safeguard personal data. Policies should also be in place to provide that lending decisions are being made in compliance with applicable law.
Still, it is exciting to see financial technology that can be used to help financially challenged consumers access better quality products and as a way for investors to capitalize on opportunities with financial and social returns.
Audrey Choi is a managing director and the head of global sustainable finance at Morgan Stanley. Jennifer Tescher is the president and chief executive of the Center for Financial Services Innovation.