KC Federal Reserve studies unbanked and underbanked groups

A new study of this population by the Federal Reserve Bank of Kansas City provides insight into why some consumers choose to manage their finances outside the traditional banking system.

Through a series of focus groups in Kansas City, Denver, Omaha and Oklahoma City, dozens of unbanked and underbanked consumers discussed their mistrust of banks, how that mistrust affects their decisions, and their personal strategies for meeting financial goals through alternative financial service providers.

The complete results of the study are available at unbanked.kcfed.org .

The study found that unbanked and underbanked consumers:

1. face external pressures and financial challenges that limit their ability to use banks;
2. use complex financial management strategies to meet their financial service needs based on cost, comfort and convenience standards;
3. develop these strategies through personal experience and the influence of others; and
4. express a desire to use banks and rejoin the financial mainstream.