For banks and financial institutions, engaging underbanked communities is key to spreading financial education and maintaining compliance under the Community Reinvestment Act (CRA). Fortunately, by leveraging technology and embracing the needs of students and young adults, reaching underbanked communities has never been more possible.
Here are four solutions for using financial education to connect with the underbanked:
- Go mobile. Mobile usage has skyrocketed over the last several years, but enacting a comprehensive mobile strategy for financial education is especially important for reaching people with low-to-moderate incomes. Since smartphones are less expensive than computers and can perform most of the same functions, many use them as their main source of technology.
- Scale with digital. To reach more people in a way that is both scalable and cost effective, embrace digital learning. By providing financial education programs online or through an app, more people can have access to the information they need.
- Break down language barriers. A 2014 study by the National Council of La Raza found that 33 percent of Spanish speakers selected their bank with language accessibility in mind. Offering financial education solutions in multiple languages helps eliminate these barriers.
- Think beyond credit scores. According to FICO, 53 million people — the majority of whom are millennials or low-to-moderate income households – don’t have a credit score, making this standard that banks and credit unions use to evaluate consumers problematic. Instead, certificates and test scores for financial education courses could be used to determine credit risks for underbanked populations.
Employing strategies to reach underbanked communities means the next generation will be more informed and confident about their financial decision-making – and these four solutions are a great place to start. Learn more about how your financial institution can better reach underbanked communities.
To learn more about EVERFI, visit us at EVERFI.com/FinancialEd.