Utilizing Kiosks in Underserved, Low-Income Banking Communities

Author: Source Technologies

A kiosk in an underserved, low-income banking community offers a physical location that provides basic banking services and financial education to individuals who may not have easy access to traditional banks. These kiosks are typically located in areas where there are few or no bank branches, and they aim to increase financial inclusion and improve financial literacy in the community.

The services provided by these kiosks can vary, but they typically include basic banking services such as opening a savings account, depositing and withdrawing money, or transferring funds. They may also offer other financial services such as bill payment, money orders, and check cashing to the penny. Additionally, these kiosks may provide financial education resources to help individuals better understand and manage their finances.

The Federal Deposit Insurance Corporation (FDIC) conducts surveys to track the number of unbanked and underbanked households in the United States. The most recent survey, conducted in 2021, found that approximately 5.9 million households in the United States were unbanked, meaning they did not have a checking or savings account.

In addition, approximately 18.7 million households were underbanked, meaning they had a bank account but also used alternative financial services such as payday loans or check-cashing services. The FDIC survey also found that the unbanked and underbanked populations were disproportionately made up of low-income households and households with less education.

Why Should Banks Invest in the Underserved Banking Community?

Banks should invest in the underserved banking community for:

  • Business Opportunities: There is a significant potential market for banks to provide financial services to underserved communities. By investing in this market, banks can access new customer segments and generate new sources of revenue.
  • Social Responsibility: Banks are responsible for promoting financial inclusion and supporting underserved communities. By investing in these communities, banks can help individuals build wealth and improve their financial well-being.
  • Regulatory Compliance: Many banks are required by law to invest in low-income and underserved communities as part of their regulatory compliance. This can include requirements to provide certain types of financial services, such as community development loans.
  • Competitive Advantage: By offering financial services that are tailored to the needs of underserved communities, banks can differentiate themselves from competitors and build customer loyalty.
  • Reputation: Banks that invest in underserved communities can also improve their reputation and brand image. By demonstrating a commitment to social responsibility and financial inclusion, banks can build trust with customers and stakeholders.

Investing in the underserved banking community is not only a matter of social responsibility, but it’s also a sound business strategy that can provide significant opportunities for growth and differentiation. By working to build more equitable financial systems, banks can help promote financial inclusion and improve the financial health of individuals and communities.

Challenges of Underserved Banking Communities

Today’s labor market poses significant challenges for many credit unions residing in rural areas and those supporting underserved markets. Hiring, training, and retaining staff has become one of the biggest challenges facing many of these financial institutions, and it threatens their very existence.

With this challenge comes the real threat: these financial institutions will be forced to move or close offices that support economically distressed communities. Providing credit unions with an option to support these communities economically is critical to the people who live there.

A core-integrated self-service kiosk supports nearly every transaction that can be processed at the teller line. This includes advanced transactions like an official check, money order, and statement printing as well as loan applications and payments or even cashing a check down to the penny.

Many consumers in these areas are heavy cash users and access to a self-service kiosk allows them to make cash payments on loans or cash deposits safely and securely.

How Low-Income Banking Self-Service Kiosks Create Community Value

It is estimated that there are over 450,000 ATMs in the United States today. Consumers use ATMs primarily for withdrawing cash, checking account balances, getting cash advances from credit cards, and making cash and check deposits.

The opportunity to utilize a core-integrated, self-service kiosk that can process nearly every transaction that a teller can open a significant opportunity for financial institutions to place kiosks in their branch lobbies or strategic areas within distressed communities. These kiosks allow consumers to process transactions more quickly and efficiently and give them local access to critical banking services.

Studies have shown high levels of customer satisfaction when they can self-transact; placing these full-functioning “branch in the box” in local communities helps drive customer retention and customer satisfaction.

It would be financially prohibitive for many financial institutions to build a branch in every distressed community that needs financial services, but now they have a real option to support all their consumers where they live and work. This innovative kiosk technology allows financial institutions to expand their member base and financial service products to the people who need them the most.

How Your Financial Institution Can Support Underserved Banking Communities

Kiosks in underserved communities offer basic banking services and financial education to individuals who may not have easy access to traditional banks or credit unions. The FDIC has found that the unbanked and underbanked populations are disproportionately made up of low-income households.

Financial institutions should invest in the underserved banking community for business opportunities, social responsibility, regulatory compliance, competitive advantage, and reputation. The challenge faced by many financial institutions in these communities is hiring, training, and retaining staff; providing access to self-service kiosk technology offers a solution to this problem.

Self-service kiosks have had a significant impact on branch banking traffic by reducing wait times, increasing efficiency, and improving customer satisfaction. Investing in the underserved banking community is not only a matter of social responsibility but also a sound business strategy that can provide significant opportunities for growth and differentiation.

Contact us today and find out how your financial institution can better support the underserved communities in your area by adding core-integrated, self-service kiosk locations.

Who Is Source Technologies?

Source Technologies is a Charlotte, NC-based financial services company that has 35+ years of manufacturing, software development, and software integration experience. Our primary mission is to empower financial institutions to become more efficient, secure, and customer-centric by integrating payment solutions that meet the individual needs of each organization.

Source Technologies offers a secure and efficient solution for financial transactions through dynamic hardware, software, and self-service solutions. We provide MICR printers for printing checks and other negotiable documents with enhanced security features, as well as software for printing checks remotely while maintaining central control over the process.