In a summit focused on financial inclusion, the FDIC spoke about the results of their efforts to create an low cost, low risk account designed to help banks penetrate the underserved market. Called “Safe Account”, the concept is described here:
The template called for accounts with very low opening balance requirements, free automatic savings, online bill pay, electronic statements, a minimum balance of one dollar, and no overdraft. Checking accounts could not have a monthly fee of more than three dollars. All of the accounts had to have the option of using direct deposit.
Even though the results were unremarkable (less than 3,000 accounts opened across all the pilot participants), this test still can help to inform the market as to the account characteristics inherent in certain underserved market segments. For example, these accounts had a sustained average balance of less than $250 according to the data in the Bank Talk article. With no marketing behind these accounts and account acquisition activities were wholly dependent on branch personnel to promote the account, perhaps the lesson learned here is that consumers who fit this profile and need a transactional account will most likely turn to a general purpose reloadable prepaid card which can be found in a wide variety of retail and an expanding base of banking outlets.
Click here to read more from Bank Talk.