Monday, 23 July 2018

Information and commentary for the small business banking industry

Who are the unbanked?

22 Jul

I found this World Bank infographic which outlines that 2.5 billion people don’t have a bank account.

Not surprisingly in countries that have poor infrastructure, low wages (77% of adults worldwide earn less than $2 a day…..), distance to travel.

A key issue is bank fees. Banks need to find a way to lower the transaction costs of money management. If you’re saving $1 a week it’s not worth the effort of walking to the bank, and minimum bank fees make it a no brainer to keep your cash under the mattress. Once a bank has invested in their infrastructure, the cost of processing trends towards zero as people move to online payments. I’d suggest;

  • Charge over the top for people still writing cheques and paying with cash
  • Make it almost free for anyone using online banking or mobile payments
  • Increase the share of the non banked in your country (students, kids with pocket money, low wage earners)
  • Provide the free financial literacy information you provide to turn them into profitable customers with added value and services

But basic banking should be close to free.

unbanked-flier


GSCirc

Glen Senior
Glen is the founder and CEO of The Small Business Company, a New Zealand based agency that specialises in helping banks communicate with small businesses through content marketing. He has written a number of books on small business principles and is a sought after consultant and conference presenter.

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