Underbanked? More Like Underwhelmed

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American Banker consumer finance reporter Kevin Wack recently wrote what so many in the industry are thinking: stop describing customers as "under-this" or "un-that." Customers are not entrees; they deserve more accurate and up to date descriptors if we're going to refer to them in the third person.

Three years ago, when my company BillFloat was launching, our team developed a persona that described our typical customer based on research. Let's call her Alice. She's 35 years old, married with a 7-year-old child, and lives in Dallas. Her family reports an annual household income of $45,000. Alice uses her checking account and debit card to pay bills. She has not had a credit card since 2008, and borrows money for unexpected expenses. She occasionally used prepaid cards.

Like so many consumers and small businesses that rely on alternative financial products powered by nonbanks, Alice is definitely not underbanked. She has access to a broad range of bank-issued and sponsored products.

Alice tells us that despite having been a banked consumer for many years, her bank doesn't seem to want to give her what she needs – occasional credit. Given her asset and credit profile, she is not a customer that her bank is pursuing in the cross-sell haze that is consumer banking today.

If we're looking for one adjective to describe Alice and her bank relationship, and if we really want to stick to the preposition "un," then we can safely say that Alice is "underwhelmed" by her bank. She receives more solicitations from AT&T or Sprint than she receives from her own bank.

Why does Alice feel ignored by her bank? It's very likely because of her economic profile and the use of credit bureau and bank account data to identify and cross-sell to banked customers.

I'm calling this composite customer Alice for a reason. She is Asset Limited, Income Constrained but Employed – a term coined by the United Way to describe the many U.S. households that earn above the Federal Poverty Level but still struggle to meet basic needs and be financially self-sufficient.

Alice is far more representative of the consumer and small business segment that many in the industry are focused on serving. She (or he – it could be a guy, too) is the very customer that banks should be looking to for future loan and deposit growth. Alice is the head of a household and has a job. She is responsible for paying household expenses and providing for her young family. If any customer would be a lifelong loyal bank customer, it would be Alice.

We all know Alice. It's time to be more accurate when describing customers and defining products to meet their growing needs. One day underwhelmed Alice will hit her financial stride and move her entire relationship to a new bank or alternative provider who calls her by her name and gives her what she wants.

Ryan Gilbert is co-founder and CEO of BillFloat.

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Consumer banking