Serving the Unbanked Population, Pt. 3

Reimagining financial inclusion through technology

Married couple reviewing their finances
Married couple reviewing their finances
Married couple reviewing their finances

In our ongoing series on how financial institutions can better serve the unbanked and underbanked population in the US, we broke down the three ways more than 40 million people are underserved by traditional banking institutions and how unbanked Americans are increasingly burdened by alternate financial services .

In this final article, we’ll look at what key players in the fintech space are doing to promote financial inclusion to fully bank the unbanked and underbanked population and provide innovative tools to help them take control of their finances.

It’s easy to see why large banks and credit unions haven’t done more to help underbanked and unbanked Americans become fully banked. Focusing on financial inclusion carries high risk with relatively low returns. In bald terms: These populations are often too costly to be served profitably.

Fintech is now a significant part of the financial services landscape, presenting technology as the most potent catalyst for banking the unbanked. Digitizing banking through technology holds the power to ensure no one is left out of the banking ecosystem.

Easy-to-use apps and other digital tools can attract customers who might be reluctant to visit a branch, or those borrowers who want to get out of debt and begin their journey to a strong credit score. Technologies can make peer-to-peer lending safer and more secure to help newcomers to the banking space side-step traditional financial services companies. And in the era of increasingly niche startups, emerging fintech solutions can be hyperfocused on providing a single service—or they can go wider, like those working to expand access to existing financial products to a larger audience via advanced risk-calculation techniques.

Ultimately, fintech has the potential to drive financial inclusion—helping underbanked and unbanked Americans build financial literacy, repair credit, and even create and scale small-business opportunities. And they can do it by offering easy-to-use, non-predatory services.

Four trends we see in today’s fintech

There’s a lot of growth happening, and it can be dizzying trying to keep a pulse on what’s new in the fintech space. Here are four key trends we see in today’s market.


Early wage access (EWA) lets employees tap into the pay they’ve earned before the end of the payroll period, a critical benefit that makes it easier to pay expenses like rent or car payments that may be due before an employee receives their check. Two EWA models are currently at play: one where employees register with their employer (Walmart, McDonald’s, and ADP all offer EWA to employees), and another where they directly enroll with the provider, such as Payactiv, Dailypay, Even, and a host more.

EWA means employees don’t have to turn to payday lenders and can avoid costly late fees and overdraft fees altogether. And some fintech companies in this space are even broadening the features in their apps to include financial wellness advice and best practices for money management, as well as overdraft warnings and a host of cost-saving benefits like discounts at local stores.

Early Wage Access (EWA)


Buy now, pay later (BNPL)—which allows consumers to pay for purchases over a series of interest-free installments—is certainly not a new concept. But today’s digital BNPL solutions are making the process much more accessible and easier to manage, too.

Companies like Klarna, Afterpay, and Affirm are modernizing layaway and installment payments to provide more consumers with flexible payment options for their purchases. And unlike credit cards, which are either not accessible or carry exorbitant interest rates to those with subpar credit, BNPL solutions are interest-free. The pandemic has compounded seismic growth in this area, with recent reports indicating BNPL will represent $680 billion in global transaction volume in 2025.

Buy Now, Pay Later (BNPL)


It’s not easy navigating today’s financial services, even if you’re fully banked and have enjoyed a longstanding relationship with your institutions. But for underbanked and unbanked Americans, new fintech companies are making it possible to understand the core components of financial literacy and how to build a solid credit standing. New apps in this space show borrowers what they need to do to avoid late fees and fines, and ensures consumers applying for credit understand the applications they submit.

Financial wellness and education


The fintech space is also helping to amplify the social safety net in the US. Companies like Providers (formerly Propel) launched their initial app to help Supplemental Nutrition Assistance Program (SNAP) recipients check their balances from their smartphone, browse deals at local grocery stores, and see which retailers accept food stamps. Now they’re going even further in their quest to help underserved Americans manage government benefits and their incomes by opening a new checking account or obtaining a debit card through Providers.

Supplemental Nutrition Assistance Program(SNAP)

Fintech looks to make finance easier for the unbanked and underbanked, even outside of traditional banking services

Disruptors in the fintech space have been slowly chipping away at the market share across numerous business verticals outside traditional banking and credit markets.

Companies like Robinhood create opportunities to buy and sell stocks and other assets without charging commissions on trades like traditional banks. And its soaring popularity has forced more traditional trading businesses to remove commissions for their customers. Over in the consumer lending space, companies like Mission Lane and Petal provide credit cards for younger consumers or those without a substantial credit history by analyzing existing spending patterns and banking history to get a more comprehensive view of an applicant’s creditworthiness.

Driving the vast majority of these offerings are cloud-driven integrations, which allows fintech companies to:

  1. retrieve data files from major credit bureaus with a single request, automatically removing duplicate tradelines across bureaus and allowing “waterfall” logic to eliminate the need to resend inquiry data
  1. automate trailing loan document collection to support a paperless stipulation collection process—collecting stipulations faster, directly from borrowers and their banks to minimize document tampering
  1. verify financial calculations to ensure compliance with individual state and federal interest rate regulations within the loan-origination workflow.

Additionally, fintech is applying a host of machine learning and statistical modeling to the vast volumes of credit, transactional, and customer data in their efforts to improve credit underwriting. Machine learning has proved invaluable in extracting greater value from credit bureau data and drawing insights from a multitude of variables in a single credit model—leading to more accurate lending decisions, reduced default rates, and lower portfolio risk.

How can traditional financial institutions make inroads to better serve underbanked and unbanked Americans? Put customers first.

Financial inclusion, built on sustainable business models with mainstream financial service firms and powered by technological innovation, brings underbanked and unbanked consumers into an ecosystem where they can flourish and integrate into the broader formal economy.

However, it’s not enough for traditional financial institutions to merely reduce the number of underserved customers across the US—they also need to ensure the products they offer make it easier for those customers to take control of their financial future, grow their financial literacy, and put them on the path to financial wellness.

One way traditional outlets can accomplish this is by developing innovative products tailored to meet the needs of today’s underserved consumers, as we’ve seen numerous companies achieve in fintech. In the same vein, many communities within the general population have not only been underserved by financial institutions, they’ve also been improperly served—whether it’s being sold products that weren’t appropriate for their financial needs, or having to navigate swift, steep changes in interest rates, fees, or penalties. For today’s banks and credit unions, clarity in communications, process, and access are critical.

That’s because consumers aren’t just comparing financial services companies to other financial services companies when it comes to choosing which brands they do business with—they’re comparing their experiences across a vast array of business sectors. And in an age of on-demand offerings and hyper-tailored customer experiences, today’s consumers are demanding that brands not only recognize their needs but treat them with respect at every touchpoint.

With the financial services landscape evolving at breakneck speeds never seen before, traditional financial institutions need to recognize that financial inclusion—ensuring their products are easy to access, easy to understand, and easy to use—isn’t just good for people: It’s good for business, too.

Get to Know Celerity

Is your business ready to move the needle on financial inclusion to build meaningful trust and better serve underbanked and unbanked Americans? Celerity is here to help. Over more than 15 years of successful engagements, our Financial Services team has worked across the industry, providing a unique blend of domain knowledge, technical, and functional expertise.

From identifying strategies to engage underbanked and unbanked populations to understanding the synergies between traditional financial institutions and fintech, to helping you develop partnership models that drive the customer-centricity your business needs to provide superior customer experiences, Celerity is ready to help move your business forward—together.

Contact us today to start a conversation.