Magazine article The Crisis

The Rise of Mobile Banking

Magazine article The Crisis

The Rise of Mobile Banking

Article excerpt

For the first time in 15 years, more bank branches are closing than opening throughout the United States, with banks closing at disproportionally higher rates in communities of color. As a consequence, not only are middle-to lower-income Americans facing increasingly limited access to financial representatives and banking services, but the loss of banks has also resulted in the influx of predatory lenders and cash-checking centers, which increases communities' economic vulnerability.

While there is not a true replacement for banks in our communities, mobile banking can be utilized to connect communities to financial services. A recent Nielsen report on the African-American consumer found that nearly half of African Americans use smartphones and 58 percent use their smartphones to access Internet (more than any other racial group). These findings are noteworthy because they highlight opportunities to use smart-phones to maintain our communities' relationships to the banking industry as the number of branches decreases.

Mobile banking services not only benefit people who are "banked" - those who maintain checking and savings accounts with established financial institutions-but they also reach to the under-banked population, which comprised roughly 21 million Americans in 2010. The proportion of U.S. households that are unbanked varies considerably among racial and ethnic groups, with people of color being more likely to be unbanked than the population as a whole. Nearly 22 percent of African Americans are unbanked, followed by 19. …

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