Tech firms target the underbanked, unbanked

By Robin Amlot

According to the Federal Deposit Insurance Corporation (FDIC) some 5.4% of US households are unbanked – amounting to 7.1 million households or around 55 million people. In the UK around 1.23 million people are unbanked. Around the world, just 7 economies account for almost half of the unbanked population globally while China and India account for almost a quarter.

What makes these figures important? The impact of the global Covid-19 pandemic and the move away from cash usage has thrown the plight of the unbanked and the under-banked into sharp relieve. It is all very well to speak of the coming of the ‘cashless’ society but even in developed economies there are literally millions of people without access to even basic banking services. It is heartening, therefore, to report a couple of recent developments in attempts to address this issue.

In the US, Jack Henry & Associates, Inc, provider of technology solutions and payment processing services, reports that its Jack Henry Banking division announced that, as part of an American Bankers Association (ABA) initiative, it has committed to equipping banks nationwide in the US with Bank On-certified accounts. These accounts are designed to serve the unbanked and underbanked population with modern banking services, including robust transaction capabilities such as debit or prepaid cards and bill pay – all at a low cost and without overdraft fees.

More than 40 banks offer Bank On-certified accounts today, including Jack Henry client Indiana, Pa.-based First Commonwealth Bank. Jack Henry will deliver the guidance, tools and resources to make certification easier for all of its core bank clients.

Norman J. Montgomery, executive vice president of First Commonwealth Bank, said: “We are proud to be an early member of the Bank On movement, providing the underserved in our communities with the tools necessary to improve their financial health. Offering a certifiably secure and trusted way to manage finances can help bring individuals and their businesses new opportunities and advantages. It’s an important step in caring for and building our communities, which are inclusive of people of all backgrounds and socioeconomic status.”

ABA President and CEO, Rob Nichols, added: “We deeply appreciate Jack Henry’s support for this important initiative. By simplifying the process for their bank customers to offer Bank On-certified accounts, Jack Henry will make it easier for Americans across the country to gain access to the banking system and the significant benefits that come with it.”

Stacey Zengel, senior vice president of Jack Henry & Associates and president of Jack Henry Banking, added, “There has been progress made around financial inclusion over the years, but there is still much work to be done. By rallying together, FinTechs, associations and bankers can make a meaningful impact and lend a helping hand to unbanked and underbanked people and business across the country. Many banks may find that they are offering services similar to the Bank On Account Standards already; this movement will give them the extra credibility and awareness to be even more impactful, while inspiring more banks to rise to the occasion.”

On the other side of the Pacific, Tokyo-based LINE Corporation announced the launch of LINE BK, the first “social banking” platform in Thailand, connecting Thailand’s most popular social media platform and one of the country’s banks. Under the slogan “Banking in Your Hand,” LINE BK lets customers transfer money, open savings accounts, apply for loans, and make payments easily and conveniently from the LINE app. LINE BK is operated by KASIKORN LINE, a joint venture between LINE subsidiary LINE Financial Asia and KASIKORN Vision Company Ltd, a subsidiary of Thailand’s KASIKORNBANK.

Among a range of savings, loan and debit card products being made available, the new service has specifically targeted freelancers, and those without fixed salaries and pay slips, such as small business owners, who will now be able to access a source of funds through LINE BK’s loan services.

KASIKORN LINE said it will continue to develop new services and innovations to meet the financial needs and empower the Thai people through simple and streamlined banking services. LINE plans to expand its banking services into other countries, including Japan, Taiwan, and Indonesia.