Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
Underbanked generated 45B in fee interest revenue in 2010
NEW YORK (11/8/11)--Roughly 60 million underbanked consumers in the U.S. generated about $45 billion in fee and interest revenue for financial services providers in 2010, according to new research.

That means credit unions aiming to serve the underbanked will see competition from sectors looking to profit from this market while themselves having the opportunity to provide low-cost alternatives.

The total dollar volume of the underbanked marketplace in 2010 was roughly $455 billion in principal borrowed, dollars transacted and deposits held, said the Center for Financial Services Innovation (CFSI) and Core Innovation Capita, which released the data last week.

The results indicate a substantial need for financial products and services to serve the unbanked population, said the organizations.  The underbanked market showed strong growth in certain segments of services. For example, payment services grew 6% and credit services grew 2% from 2009 to 2010, said the groups.

They also noted "a significant revenue opportunity in providing products and services" aimed at the underbanked. Several products experienced high revenue growth rates during the period, the organizations said. Internet-based payday lending rose 35%; general purpose reloadable prepaid cards, 33%; and payroll cards, 25%.

The new data "confirm that there is a large opportunity for the financial services industry to create products and services that are both profitable for them and provide much needed solutions for this consumer segment," said Arjan Schutte, managing partner, Core Innovation Capital. "Our vision is to transform this market in a way that is significantly more profitable to the industry, will save consumers billions of dollars and help create upward mobility for tens of millions."

The groups said there are major market sectors that suggest an opportunity for more competition and that warrant greater attention.


RSS





print
News Now LiveWire
CUNA: CUNA offices closed through Friday, News Now returns Monday http://t.co/a5xbLzQKDj
12 24 ago
Reminder: @CUNA's Madison, D.C. offices will be closed through Friday, open again on Monday. #NewsNow will publish Monday.
12 23 ago
MI dentist to match @CUDirect's $20K to @HurleyMedical as a result of #20for20 online voting http://t.co/hqmIc9LpK1 @CMNHospitals
12 23 ago
New #creditunion chartered in St. Louis - #LutheranFCU - by @TheNCUA http://t.co/faPfANGS0P. Only 3rd new FCU charter this year.
12 23 ago
Don't get hacked during the holidays-use these tips from @CUNA http://t.co/jEqxni6NhO #StoptheDataBreaches http://t.co/woIxPOIyys
12 23 ago