It may be hard for some to fathom that in today's world, there are people who still use a dial-up service to access the web, drive for 20 minutes to get cash from the nearest ATM or don't have any financial institution branches in their communities.
While that's the daily reality for people who live in underserved rural or semi-rural areas, consumers who are unbanked or underbanked in many communities across the nation also face financial challenges.
What all of these consumers have in common, however, is that most of them own a mobile phone, and credit unions are leveraging mobile banking to not only meet their financial needs, but to improve their financial lives.
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"It is pretty interesting, the mobile app is one of our fastest growing services," Ed Sivak, executive vice president of policy and communications for the $181 million Hope Federal Credit Union in Jackson, Miss., said. "Each month you see growth in both in the number of people who sign up and register and in the number of people who are actively using it."
He added, "Far and away, the No. 1 thing that people use mobile banking for is for checking their balance, which is if you think about it, an important feature when it comes to making sound financial decisions. We know that members are looking at their balance before making transactions. And the second most frequently used mobile app feature is internal transfer. These are good things because members are actually using the mobile app to make good financial decisions. We see this as a service to empower our members to better manage their finances."
More than half of Hope's 30,000 members live in households that earn less than $35,000 a year.
About 30% of Hope's members have used high-cost alternative financial services such as money orders, check cashing, remittances, payday loans, refund anticipations loans, rent-to-own services, pawn shop loans or auto title loans. However, 72% of those members also say they used those alternative financial services less after they joined Hope, according to Sivak.
Mobile banking appears to be a growing channel with which credit unions can attract and retain underserved consumers.
For more details about how Hope and other credit unions are serving the underserved through mobile technology, read the Feb. 24, 2016 print issue of Credit Union Times.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
