Innovative Banking Products for Underserved Markets

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Innovative Banking Products for Underserved Markets

  1. 1. Innovative Banking Products for Underserved Markets<br />
  2. 2. Identify Community and Market Characteristics<br />Know your community Countries of origin, major employers, schools, neighborhoods, trusted organizations.<br />Know your competition<br />Offer alternatives that improve on existing products and address unmet needs Give people a reason to come to you and trust you.<br />
  3. 3. Demographics Survey of 328 Mexican Immigrants, Mexican Consulate Chicago 2008<br />Young community:<br /> 57% 18-34 <br /> 34% 35-54<br />Low-to moderate annual household income:<br /> 35% $0-$15,000<br /> 34% $15,001-30,000<br /> 19% $30,001-$50,000<br /> 7% Over $50,000<br />High Savings Rate even in lower income ranges:<br /> Average annual remittances: $2,500<br />
  4. 4. Trends: Income Growth<br />
  5. 5. Trends: Services<br />Financial service usage changes with time in US: <br />
  6. 6. Evolution in the Marketplace<br />
  7. 7. Barriers<br />For those choosing not to use accounts, major barriers: ID and min. balance.<br />Perception that accounts carry high fees. <br />Need for immediate access to funds.<br />Convenience.<br />Consistent Service, including language capacity. <br />Non-traditional credit profiles.<br />
  8. 8. Opportunities<br />Asset protection: health insurance, auto insurance, life insurance.<br />Access to credit: home purchase and small business.<br />Saving for Education<br />Cross-border needs<br />Local community needs: domestic money transfers, loans for citizenship and immigration status.<br />
  9. 9. Case Study: Family Unification Loan<br />Loan for immigration services program pilot in Austin, Texas.<br />Initial launch led to no borrowers.<br />Broadened outreach, engaged more partners, used the media.<br />Result: All initial capital investment, $30,000, loaned out in a four-month period. <br />Now demand for additional capital and interest in expansion to other geographies.<br />
  10. 10. Effective Market Strategies <br />Better value is important, but not enough. <br />Workforce and atmosphere should reflect the community.<br />Meet people where they are—location and services. <br />School-based outreach—reaching parents through their children.<br />Leverage employer relationships.<br />Integrate education into financial settings, such as account opening or taking out a loan.<br />
  11. 11. Importance of Marketing<br />
  12. 12. Appleseed Resources<br />Market Information<br />Consumer Focus Groups<br />Best Practices<br />Financial Education<br />Visit: www.appleseednetwork.org and<br />www.texasappleseed.net<br />
  13. 13. Conclusion<br />“As we try to break some of these consumer behavior patterns… We have to be cheaper and we have to engender a greater degree of trust in us.”<br />
  14. 14. Contact Information<br />Annette LoVoi<br />Appleseed<br /> Tel: 512.542.9082<br />Austin, TX USA<br />alovoi@appleseednetwork.org<br />

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