Overcoming the Banking Barrier: What Unbanked Consumers Actually Want

Financial stability begins with a strong foundation, and a critical component of that foundation is having a basic transactional account. Transactionally, an account empowers individuals to securely deposit earnings, pay bills, and save for the future—all at a significantly lower cost than alternative financial services like payday lenders or check cashers.

However, entering the mainstream banking system can be an uphill battle. An evaluation of the Cities for Financial Empowerment Fund's (CFE Fund's) Financial Empowerment Center initiative found that unbanked clients had a significantly more difficult time achieving financial outcomes. Compared to banked individuals, they were less than half as likely to increase their savings and over a third less likely to establish a new credit score.

To better understand how to bridge this gap, the CFE Fund conducted a comprehensive research study to discover what messages actually motivate unbanked individuals to open accounts. Here are the key takeaways from the research regarding what unbanked consumers truly want from a financial institution.

1. Fear of "Surprise Fees" is the Biggest Roadblock

While unbanked consumers generally have negative feelings toward banks, research shows they are highly receptive to changing their minds when presented with the right product features. The primary deterrent to opening an account is the fear of losing control over their money through unpredictable fees.

Survey respondents explicitly preferred messages that countered this fear directly; a message emphasizing "no surprise fees" performed much better than one simply highlighting "low cost". Guaranteeing that an account cannot overdraft addresses a central concern among unbanked people, alleviating the worry of being hit with unexpected, painful penalties.

2. Tangible, Immediate Features Beat Long-Term Aspirations

While aspirational goals like homeownership or starting a business are important, unbanked individuals do not typically view a bank account as the bridge to getting there. Instead, consumers respond far more favorably to ways a bank account can help them right where they are. The most motivating short-term goals include building savings, decreasing debt, and creating an emergency fund.

3. Security and Convenience are Top Priorities

Rather than flashy technology, unbanked consumers want specific, tangible features related to securing their money. Top-rated features include fraud protection, zero minimum account balance fees, no overdraft fees, and the ability to lock a lost or stolen debit card.

Additionally, access to a debit card and the convenience of direct deposit were cited as highly important benefits that take the hassle out of banking.

The Bottom Line for Safe Banking

The data is clear: unbanked people want to feel secure that once their money is in an account, it will stay there. Messages that highlight tools for easy banking, emphasize how accounts can maintain control over money, and note how they help achieve short-term financial goals are the most compelling drivers of account adoption.