JACKSON, Miss. — Known as one of the industry leaders serving the underbanked and underserved, Hope CU is turning its focus from traditional branches to enhanced mobile apps. And this move grew usership from 800 to more than 1,500 in just a few months.
"We came to understand that poor people are adopting mobile apps through smartphones at a higher rate than online banking through computers," Hope CU's Chief Financial Officer, Richard Campbell, said during a webinar hosted by Bluepoint Solutions. "We are seeing an uptick in mobile first households."
Bluepoint's Chief Market Officer, Andrew Tilbury, explained that approximately 68 million Americans are either underbanked or underserved. "This is a staggering number when you consider the population of the United States."
Tilbury added that there are many misconceptions about this demographic. For example, 52% of underbanked are homeowners and 41% sought alternative financial services such as pawn brokers, title loans and payday lenders in the last 30 days. "It's our position that many credit unions are better positioned than larger banks in communities to serve the underbanked."
Campbell said the biggest challenge to date is competing with predatory lenders that dominate the market, despite the high cost of their services - often translating to triple-digit APRs. But the mobile app will help address another big challenge: providing the underserved population with access to service.
Scot Slay, the CU's vice president and marketing and communication director, explained that many of the members and people helped are of modest means and live in rural areas. "These people have difficulty accessing mainstream providers."
To date, Hope CU has approximately 2,300 registered mobile app users, 1,500 of which are active. Campbell expects that mobile will quickly outpace online computer banking. Part of this movement is the ability to compete with payday lenders and pawn shops via the web. "The Internet is changing the field, and now it's a level playing field," said Campbell. "We can actually compete."
Read more about how Hope CU is using technology to tap into the underserved market in Credit Union Journal's upcoming special report on technology.
