Many of the stereotypes about the unbanked and underbanked most commonly held by bank executives, regulators and consumer advocates are flat-out wrong.

Boston, MA, February 4, 2009 – A new report from Aite Group, LLC debunks 10 myths commonly held by bank executives, regulators and consumer advocates about unbanked and underbanked consumers. The analysis is based on a 400-person survey with consumers at check-cashing stores, completed in November and December of 2008.

Among the myths debunked by the report is the belief that consumers are unbanked or underbanked because of cultural and attitudinal reasons. Instead, it reveals that people are unbanked for very practical reasons, including credit, pricing, cash flow and service issues. Fifty-three percent of unbanked consumers in Aite Group's survey are impeded by credit issues, while an additional 28% face pricing issues with checking accounts, 12% are impeded by cash flow issues, and 7% constrained by service issues.

"Consumers that are underbanked and unbanked often choose to be so for practical reasons rather than attitudinal ones," says Gwenn Bézard, research director with Aite Group and co-author of this report. "Greater education and marketing wizardry is unlikely to succeed in attracting this group to checking account relationships. The only way for banks to seriously compete is to deliver a better product and value proposition."

This 29-page Impact Note contains 22 figures. Clients of Aite Group's Retail Banking service can download the report by clicking on the icon to the right.

Related Aite Group Research:

• Nine for '09: Opportunities and Challenges for Banks in 2009
• Mobile Banking for the Underbanked: Lessons from Africa
• Competing in Money Transfers: A Market Overview

To purchase this report or
for additional information,
please contact:
Aite Group Sales
Tel: +1.617.338.6050
sales@aitegroup.com