Community Developments Online
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Community Developments Investments

Fall 2004

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Tools to Tap a Growing Market

We had hardly heard of the term “unbanked,” when we began looking at the provision of retail financial services in underserved communities back in 1999. That term is now widely used to describe the millions of households (estimates range from 10 million to 25 million) who have no relationship with a mainstream financial institution. The marketing of products and services to this market is a brave new world for some banks. It requires overcoming barriers of language, financial illiteracy, and general fear and distrust of the banking system. But the rewards can be significant. Many of the previously unbanked will become loyal customers of a financial institution that reaches out to them and offers products providing a gateway to wealth-building — and they will recommend the bank to their friends.

“Many of the previously unbanked will become loyal customers of a financial institution that reaches out to them.”

This newsletter, along with our other products and services, seeks to bridge information gaps and stress some of the best practices we have seen banks using in these emerging markets. We have recently issued two analysis papers, called Community Development Insights, focusing on payroll cards and remittances. Payroll cards enable banks to attract the unbanked customers of check cashers into a direct-deposit banking relationship. Similarly, remittance services can begin to build long-term relationships with previously unbanked customers. A forthcoming analysis will look at Individual Development Accounts (IDAs), an innovative product that banks can use to help lower-income customers build assets.

OCC has District Community Affairs Officers (DCAOs) around the nation who can provide more information and guidance about these products (see "News You Can Use from OCC's Districts" for contact information).

One last note to report — with some pride: Community Developments, which we have been publishing for 12 years, recently received an award from the National Association of Government Communicators, in the Best External Newsletter category. We have also expanded our overall coverage by adding a shorter online quarterly edition that focuses on community development investments. Please send us an e-mail at CommunityAffairs@occ.treas.gov if you would like to begin receiving our materials on-line.

We hope you enjoy our publications as much as we enjoy bringing them to you.

Barry Wides
Acting Deputy Comptroller
Community Affairs