From Unbanked to Homeowner: Improving the Supply of Financial Services for Low-Income, Low-Asset Customers

BABC 04-4: The paper argues that five factors have contributed to narrowing the gap between supply and demand: technological advances that lower costs and expand consumer access; the federal government’s desire to pay benefits electronically; expansion of the alternative financial services sector; the emergence of the asset-building movement; and major demographic shifts. The most significant opportunities for near-term success are in: the workplace as an access point and distribution channel; remittances; stored value cards; bank/non-bank partnerships; and selfservice delivery. Cultural, information, and regulatory barriers remain. Nevertheless, if the financial services industry is willing to think and act creatively, it can find profitable ways to meet both the short- and long-term financial needs of low-income consumers…