Winning the Underbanked: How Banks Can Get an Omnichannel Upper Hand

by Bob Meara, April 22, 2014
Industry Trends
North America

Abstract

By leveraging existing multichannel infrastructures and new, turnkey solutions for immediate good funds, banks can win back customers forced to use nonbanks to meet basic financial needs.

As retail banks look for new revenue opportunities, providing services customers currently go elsewhere for deserves serious consideration. Both check cashing and general purpose reloadable (GPR) prepaid offerings are revenue-enhancing in their own right and provide all-important branch foot-traffic for cross-sell and up-sell, while also leveraging the omnichannel infrastructures banks have already invested in.

In the report Winning the Underbanked: How Banks Can Get an Omnichannel Upper Hand, Celent demonstrates the key gaps in the delivery models of alternative financial services (AFS) providers and prepaid card program managers and how banks can easily get an upper hand. Simple check cashing, still in high demand, is the first step banks should consider.

“Banks are leaving money on the table,” says Bob Meara, Senior Analyst and author of the report. “Their own customers are using nonbanks for check cashing services and prepaid cards simply because they don’t offer those services. But, doing so has become fairly easy with modern off-the-shelf solutions.”

This report begins with an overview of the opportunity for offering immediate good funds products to consumers and small businesses along with a primer on the competition for those services — primarily AFS providers and prepaid program managers. A case study of Regions Bank follows. Finally, the report looks at the vendor landscape for decision analytics platforms and turnkey solutions for immediate good funds in the branch, ATM, and mobile device.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Low-Hanging Fruit in the Underbanked Segment

2

Competition for the Underbanked

6

 

GPR Prepaid Program Managers

6

 

Alternative Financial Services Providers

8

Learning from a Pro

12

 

Regions Bank: Now Banking

12

Decision Analytics: Providing Instant Funds Availability

17

 

FIS Certegy

19

 

Ingo Money

21

 

VALID Systems

25

Turnkey Solutions for Immediate Funds Availability

27

 

Cachet Financial Solutions Inc.

28

 

FIS

30

 

Fiserv

32

 

NCR

34

Conclusion

36

Leveraging Celent’s Expertise

37

 

Support for Financial Institutions

37

 

Support for Vendors

37

Related Celent Research

38

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