In 2015, a Federal Deposit Insurance Corp. study found that one in five citizens were “underbanked.” In other words, the affected households had a bank account but they also needed to obtain a financial service or product outside of the banking system. That same study also found that almost 8% of respondents were completely “unbanked.” In other words, they had no relationship with the banking system.

Yet financial institutions globally are serving more people than ever. A recent report from the World Bank found that from 2011 to 2014, 700 million people became account holders at banks, other financial institutions or mobile money-services providers. The number of unbanked individuals dropped by 20%, to 2 billion adults, during that same time period.

A common trait among the underbanked, regardless of their country, is their reliance on mobile access more than online or in-person contact. Interestingly though, new financial infrastructure that meets this mobile-focused profile in many cases is being designed and constructed in developing nations more readily than in developed nations. Developing nations, after all, are building the infrastructure from scratch rather than retrofitting legacy systems.

Take India, for example. Unlike people in the United States, many Indians have never owned a personal computer. Therefore, mobile is the primary channel for Indian financial institutions to reach a far-flung population, particularly in rural areas. In fact, in India there are more than 350 million smartphone users, a number expected to double by 2020.

To be sure, the use of mobile banking is also growing in the United States. A recent Bank of America report found that 54% of consumers used a mobile banking app, for instance. However, there are usage disparities based on socioeconomic statistics, highlighting a flaw in U.S. mobile banking strategies.

In 2015, Pew Research found that although two-thirds of Americans owned a smartphone, 19% of respondents rely on a smartphone to some degree for staying connected to the world around them. Further, 10% of Americans who own a smartphone lack broadband internet at home and 15% who own a smartphone admit to having a limited number of options for internet access beyond their cell phone. Deemed “smartphone-dependent,” this group is largely made up of relatively low-income individuals, consumers with less education, younger adults and minorities.

Mobile banking is clearly an increasingly popular way for consumers to bank, as well as a platform for financial institutions to demonstrate their innovative capabilities. However, financial institutions in developed nations need to remember that for some individuals, mobile is the only way to bank.

When U.S. banks are developing products and services, they need to regard mobile as a standalone offering and not just a complement to their in-branch and online capabilities. A new online tool that can only be fully accessed via computer will not let mobile-only customers experience the product or service like other clients with computer access. Instead, banks should take a page from their developing-world counterparts and recognize mobile as a key driver of accessibility and a means of increasing financial opportunity for all consumers.

Chet Kamat

Chet Kamat

Chet Kamat is senior vice president of Oracle Financial Services.

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