The Tooth Fairy and the Unbanked

toothunbankedThere is a time when each of us begins our relationship with .  For some, the relationship begins with the tooth fairy when she leaves us a dollar under our pillows.  For me, it was when my grandfather would fill his pockets with change before he came home each night.  I would eagerly await his arrival and immediately search his pockets for money.  I never knew how much would be there for my piggy bank, and sometimes he would even surprise me with dollar bills. Eventually the piggy bank began to overflow, so he took me to his bank.  I proudly opened my first savings account, and established my own banking history.

By the time I turned 18, the savings account I started as a young child was long gone.   As a teenager, I used that money to pay for my entertainment and other activities, so I did not have to keep asking my grandparents for handouts.  If I was 18 today, I would be considered unbanked; like two-thirds of people in this age group.  I had no checking account, no credit cards in my own name, no FICO score, and earned less than $25,000 a year.  Thankfully, my grandparents supported me through college, and I did not have to worry about covering my expenses.  With today’s economy, not many in Generation Z are that lucky.

If I were that college kid today, I could use alternative sources for financial services, such as payday loans, Pay Pal, Green Dot or even pawn shops.  I could reach out to Suze Orman, who could approve or deny my purchase, tell me to learn about financial responsibility, or sell me on her own branded prepaid credit card.   The alternative financial services are not used exclusively by the younger generations.  As much as half the world’s population has little or no access to basic banking services.  In the US, there are approximately 9 million unbanked households. The ability to save money, make payments, and obtain credit is impacted by the lack of access to financial services.

The number of unbanked households is expected to increase over the next few years.  These consumers will still need to purchase necessities and other items.  Many unbanked consumers are turning to the alternative financial services because they do not feel that the traditional banking methods suit them.  As marketers, we need to be open to accepting these methods of payment or creating new financial products that appeal to these consumers.

In this economy, credit worthiness has declined, unemployment has remained high, wages are decreasing and the cost of living is increasing.  If we want consumers to become our customers, we must provide the same thrill that I had hearing my grandfather’s pockets jingle with change or the rush of waking up with a dollar from the tooth fairy.


Adrea Rubin