Access to financial services in the United States, like most everything else in this country, is highly unequal. According to a 2015 survey by the Federal Deposit Insurance Corporation, approximately 7 percent of American households are unbanked (meaning they have no checking or savings account), and an additional 19.9 percent are "underbanked." The percentages are higher—approximately 50 percent—among both low-income and minority households.
While some of this is driven by consumer preferences, economists at the New York Federal Reserve have also found that people in low-income neighborhoods "are more than twice as likely to live in a banking desert than their counterparts in higher income tracts" and "have become somewhat more likely to live in a banking desert since the crisis." (Branch closures have also affected higher-income neighborhoods.)
Financial technology, or "fintech," has been touted as a possible solution to this dilemma. These products don't require a physical branch—customers can make deposits, pay bills, and transfer money on their phones. And at least some of these products have the potential to reduce the costs associated with some financial transactions—sending remittances, for example.
[For more on this story by DWYER GUNN, go to https://psmag.com/economics/th...o-fintech-in-america]
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