A few weeks ago a handful of professionals were charged with a task. Pull on your blue jeans and tee shirts and head out into the community to do some errands that revolve around financial transactions. FinX, the challenger for this blue jeans experiment put me in the shoes of consumers without bank accounts.
FinX was developed by the Center for Financial Services Innovation, or CFSI, a nonprofit financial services consulting firm in Chicago.
So being the banker, I was ready for this and, admittedly, excited for the day. Teams of 5-6 professionals each from newspapers, banks, government, and non-profit organizations scattered across Minneapolis and St. Paul with the assigned tasks of 1) cash a payroll check, 2) cash a personal check 3) buy a present for under thirty dollars 4) send/receive a wire transfer, 5) pawn a watch, 6) inquire about a loan and 7) use public transportation all within a two hour time limit.
Being a working mom with two wonderful kids, this looked much like my typical Saturday to do list. I’m not sure I could do this even if I donned my superhero cape!
But at the end of the two hour experiment, I learned about the community we serve and the challenges they face. And this is what I discovered:
- Fees are much higher than anyone should have to pay to get “their” money. At the local check cashing shop, these fees are much higher than a bank. But, it did give access to check cashing that someone might not have if they don’t have a bank account and the experience was pleasant and professional
- Disclosures may not typically be understood by the consumer. With a heavy compliance background, I was paying special attention to the disclosures that were in small print. But, instead of a conversation between the check cashier and myself, I was ushered through the process without regard or explanation for the small print which leads me to my next point.
- The oversight process didn’t protect the consumer. Numerous times during my interactions I noticed a complete lack of oversight. For example, I gave a different address than what was on my driver’s license, yet I was still able to cash a check without question. The dangers of fraud were lurking everywhere I turned.
And, finally, the biggest lesson I learned is that as bankers we talk about the “underbanked”, but they ARE banked. Not everyone needs or wants a bank. They are using a financial service product all be it not delivered by our mainstream definition of a bank. There are non-traditional financial service products out there on the streets that are delivered in a professional manner and meet the immediate needs; however, with some of these non-traditional products, the safety net of a bank is not there to catch the individual.