For the 20% of U.S. households that do not have basic bank accounts, access to convenient,fairly-priced financial services is an issue. However, access is not the only reason why families are underbanked. Firms have been slow to adopt innovative marketing and distribution strategies that are specific to lower-income or underbanked populations, and products have not always been designed with these consumers’ needs in mind.
As the Center for Financial Services Innovation (CFSI) and other organizations encourage financial institutions to serve the underbanked, it is important to consider how these consumers view themselves, and what marketing strategies might be most effective in reaching them. For example, affinity marketing strategies allow organizations to reach their target populations by appealing to a shared affinity. While recent research published by CFSI shows that the underbanked is a very diverse population, this report will help to address to what extent traditional affinity marketing models are applicable to underbanked segments and will explore the role of the nonprofit community in marketing and distributing financial services through affinity programming. The report will also expand on our understanding of affinity marketing and offer insight into various marketing methods that might be useful in serving underbanked markets. This report was conducted using a variety of research methods, including an extensive literature review on affinity marketing, in-depth interviews with industry leaders, and case study models of effective marketing programs for the underbanked.