Bank On National Data Hub: Findings from 2020

Briggs, Matuschka Lindo; Chalise, Nishesh; Gutkowski, Violeta A.

Report

Bank On National Data Hub: Findings from 2020

Abstract: An estimated 5.4% of U.S. households—or approximately 7.1 million—are unbanked, according to the Federal Deposit Insurance Corp. (FDIC). This means these households do not have checking or savings accounts at a traditional bank or credit union. The estimated number of unbanked households in the 2019 FDIC report was the lowest since the survey began in 2009. The most common reasons survey respondents cited for being unbanked included the following: they did not have enough money for the minimum balance in an account; they did not trust banks; they said avoiding banks affords more privacy; bank fees were too high or unpredictable for them. An additional 22 million households are underbanked based on calculations by CFE using FDIC data. Meaning these households have a bank account but many times rely on alternative financial services such as money orders, check cashing services and payday loans rather than traditional loans and credit cards to manage their finances. The purpose of the Bank On movement is to improve the financial stability of unbanked and underbanked individuals and families by making safe, low-cost transaction accounts available and accessible to all. A way in which the movement reaches its target markets is by professionalizing, or building a formal structure, for banking access efforts for financial institutions and their customers. Paramount to the professionalization of such efforts are high-quality data showing the take-up, or engagement with, and usage of Bank On-certified accounts. The St. Louis Fed’s Bank On National Data (BOND) Hub serves as a national reporting platform for all financial institutions offering certified Bank On accounts. For this report, 17 financial institutions submitted data to the BOND Hub. The institutions were asked to submit their 2020 account data on 25 metrics related to account openings, usage and consistency, and online access. These data allow stakeholders to better understand the market locally, regionally and nationally. The BOND Hub also allows financial institutions to benchmark the performance of Bank On-certified products and use this information for regulator examinations of their community services. It helps Bank On coalition partners illustrate their progress in promoting local banking access without requiring multiple data requests. The ability to quantify the national impact of Bank On—and how consumers are opening and using safe, affordable transaction accounts—is an important asset for banking access efforts and demonstrates the market for Bank On-certified accounts.