Demographics

WASHINGTON — A wide-ranging study released by the Federal Deposit Insurance Corp. Thursday said that institutions have more work to do serving the unbanked.

Common misperceptions about underbanked consumers have hindered banks' efforts to attract business from them, according to the Boston market research company Aite Group LLC.

The recent frenzy of large institutions to acquire deposits by purchasing small rivals should raise questions about the organic growth opportunities of the U.S. banking industry as a whole.

When San Francisco was establishing a program three years ago to move unbanked consumers into the financial mainstream, banks and credit unions signed on because "it was a good political opportunity to generate good will," said Matt Fellowes, an advocate for the unbanked who advised city officials.

Two providers of financial data on people with little credit history say one's purchase of the other will improve the way they serve companies that extend loans to the underbanked.

WASHINGTON — The state of California launched a program Friday to help bankers reach out to the underbanked.

Phoenix Check Cashing Inc. has added prepaid cards and bill-payment capabilities to its payments offerings in an attempt to spur more use of its core service: biometric check cashing.

ORLANDO — Most mobile banking services use browsers and specialized software available for high-end phones, but several financial companies are turning their attention to the basic text message.

The National Council of La Raza is getting into the check-cashing business as part of a plan to get more people with low to moderate income into the financial mainstream.

Visa Inc. is developing a product it hopes will appeal to the unbanked: a dual-purpose contactless payment card that combines a prepaid general-purpose account with a separate account dedicated to transit payments.

Fiserv Inc. is trying to move walk-in bill payment, a service aimed mainly at the underbanked, to the checkout lines of grocery stores, where it could reach mainstream bank customers.

As the nation watches the twists and turns of the global financial crisis, it is easy to grow nostalgic about what banking was like 30 or 40 years ago, when it was strictly a local affair.

A group of banking companies in Mexico City launched an initiative last week that they say ultimately could enable consumers to use their mobile phones to make payments at the point of sale and to pay bills using standard text messaging services.

The landscape of financial providers catering to the underbanked has grown and changed dramatically in recent years. Retailers, technology firms, and other nonbanks have elbowed past banks and credit unions to grab a share of the market.

Solera National Bank in Lakewood, Colo., is hoping it can serve predominantly Hispanic consumers and businesses without having to broaden its focus.

Citigroup Inc.'s card division is attempting to broaden its reach among underbanked consumers, and that of its retail partners, through a strategic alliance with Green Dot Corp., a distributor of prepaid products.

Banco do Brasil SA, the largest retail bank in Brazil, wants to use technology from Fiserv Inc. to enter the U.S. retail business, with an emphasis on serving the unbanked and underbanked.

As the nation's Hispanic population continues to swell, more community banks are hiring bilingual employees and offering services such as online and telephone banking in English and Spanish.

The prepaid card marketer FirstView LLC is planning to use a voice biometric authentication system in its phone and online banking systems to combat a perception that its target market, the unbanked, is especially vulnerable to fraud.

Anyone who has ever attended a five-year reunion knows a half-decade usually is not long enough to see much change.