The unbanked refers to individuals who do not have access to traditional banking services or accounts, like checking or savings accounts. They may have encountered barriers to banking if they do not possess identity documents or may have little to no credit history. These unbanked populations often are reliant on alternative financial sources like payday loans and check-cashing businesses, which generally are more costly and less secure than mainstream institutions. Digital identity verification methods and alternative data sources are making it possible for financial institutions and fintechs to offer services to unbanked persons.
Use case/ examples for unbanked
Digital financial services: Providing access to traditional banking services to unbanked individuals as an alternative to check-cashing/ payday loan channels traditionally used by the unbanked, through mobile wallets and digital platforms that utilize alternative identity verification methods, rather than relying on traditional credit reports.
Alternative identity verification: Onboarding unbanked customers using document verification, biometric matching, and alternative databases to establish identity.
Financial inclusion initiatives: Supporting financial inclusion goals by extending services to underserved populations through streamlined digital onboarding that removes traditional barriers to account access.