Wells Fargo launches 10-year strategy to reach unbanked consumers

Wells Fargo is launching a 10-year initiative to bring unbanked and underbanked Americans into the financial system. The announcement comes less than a week after news that a group of banks are cooperating on a pilot program to underwrite thin-credit-file consumers. According to FDIC data from October 2020, 5.4% of U.S. households were unbanked.

Why should we care?
Unbanked and underbanked customers are traditionally not a primary customer target for major banks, since turning a profit on those customer relationships can be difficult. In recent years, fintechs offering free accounts and products with minimal fees have sought to make a dent with underserved customers, including some who don’t have bank accounts. Wells Fargo’s Banking Inclusion Initiative includes enhanced access to low-cost, credit-building consumer loans; increased awareness and outreach about low-cost, no overdraft fee accounts offered by the bank; financial advisory and education resources; and the creation of a National Unbanked Advisory Task Force that will work with the bank in developing solutions to bring more people into the banking system. The bank also pledged to partner with fintechs and invest in fintechs that cater to underserved communities. Wells Fargo’s efforts are part of a bigger industry push for a more inclusionary approach, including outreach to BIPOC communities. “With branches in more communities than any other financial institution, we believe we have a responsibility to do even more to help address this issue and the pandemic has increased the urgency,” said Mary Mack, CEO of Consumer and Small Business Banking at Wells Fargo.