How the banking industry can ensure vulnerable adults don’t remain underbanked

This industry report highlights a growing gap in the financial market: the 'underbanked' population who struggle to access traditional credit. For retailers, this represents a significant portion of potential customers who are currently excluded from your ecosystem. As banks modernize and rely more on automated, high-tech systems, many vulnerable adults are left behind because they don't fit the standard credit profile. This makes them unable to utilize traditional credit cards or bank loans for your products or services. For operators, the takeaway is clear: relying solely on prime, bank-led financing options leaves money on the table. The report suggests that the industry needs to move beyond rigid credit scoring. Merchants can bridge this gap by integrating alternative financing solutions like Buy Now, Pay Later (BNPL) or Lease-to-Own (LTO). These tools provide a pathway for customers with thin credit files to make necessary purchases. By offering a multi-lender waterfall approach, you ensure that 'vulnerable' or underbanked customers are not automatically rejected. Providing these options isn't just a social good; it is a strategic way to capture a market segment that traditional banking is currently ignoring.

Source: Finextra — Lending

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