Financial Health Market Analysis

Understanding the needs and behaviors of consumers, especially those who have traditionally been overlooked by mainstream financial services, is key to improving financial health for all. Through our landmark research, the Financial Health Network offers proprietary insights to help inform new strategies and solutions.

Financially Coping and Vulnerable Households Spent $255B on Everyday Financial Services in 2020

Our Research Reveals:

  • Eighty-four percent (84%) of fees and interest on everyday financial services are spent by the two-thirds of U.S. households who are struggling to spend, save, borrow, and plan: Financially Coping and Vulnerable households spent $255 billion in 2020, out of a total of $303 billion nationwide.

  • On average, Financially Vulnerable households spent 13% of their income on fees and interest for everyday financial services, compared with 5% for Coping households and just 1% for Financially Healthy households.

  • Black and Latinx households spent a collective $101 billion on the financial services studied, with Black households spending 6% of their annual income on average, 5% for Latinx households, and just 3% for White households.

  • Low- to moderate-income households – those with incomes below 80% of area median income – spent 7% of their annual income on these services, compared to 3% for higher income households.

The Evolution of the Underserved Market Size Study

For nearly a decade, this report has guided businesses and policymakers in pursuit of responsible financial health innovation. In 2021, the Financial Health Network has again reimagined the study, refreshing the methodology to create an even more valuable resource.

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A Legacy of Reliable Market Insights

Some key findings from previous years of our study include:

  • The financially underserved market – including 29 products across five categories – hit $189 billion in 2018, growing 4.0% from 2017.
  • The largest categories in 2018 were Short-Term Credit, with $66.1 billion in fees and interest, and Long-Term Credit, with $59.0 billion in fees and interest from the underserved. 
  • In 2017, consumers spent $173 billion in fees and interest to use $1.94 trillion in financial services
  • Fintech solutions have made inroads as more underserved consumers gain access to digital financial services through mobile phones and computers. 
  • Non-bank small business lenders are scaling fast as more small business borrowers turn to new types of lenders for credit, financial management solutions, and more

Why It Matters

Financially struggling consumers have the greatest need for products and services to help them meet their challenges. Understanding these challenges and how they differ from those of the population at large is essential for moving the needle on financial health for all.

How We Can Help

From its start, the Financial Health Network has championed efforts to increase access to quality financial products and services for underserved consumers. Finhealth challenges extend beyond this group, however. Through groundbreaking consumer and market research like the studies here, we continue to lay the foundation for new product design, industry innovations, and changes in public policy that help more Americans achieve financial security.

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Additional Research Topics

Financial health depends on a complex set of factors and circumstances. That’s why the Financial Health Network produces research in a variety of areas impacting our financial lives.