ABA Perspective
Banking On Inclusion: America’s Banks Embrace Bank On Movement
Rob Nichols, President and CEO American Bankers Association
America’s banks have a longstanding commitment to helping reduce the number of unbanked and underbanked individuals and families in the U.S. July marked a major milestone in that endeavor, with an announcement from the Cities for Financial Empowerment Fund that the number of Bank On-certified deposit accounts now available has surpassed 100. At the time this column was written, it was up to 114.
As you may recall, nearly a year ago I challenged banks of all sizes to offer Bank On-certified products, which are designed to promote access to financial services to the roughly 5% of U.S. households that remain unbanked. To receive Bank On certification, the account must meet certain standards, including low costs, no overdraſt fees, robust transaction capabilities via a debit or prepaid card and free online bill pay. Te certification is free, and the process is simple.
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When I issued that challenge in October 2020, there were 43 banks offering accounts that were Bank On-certified. Today, there are more than 90, with plenty more in the process of obtaining certification. In particular, we’ve seen a significant uptick in the number of community banks offering Bank On-certified accounts. Tis is partly due to ABA’s efforts to engage with 20 of the nation’s core technology providers — including Fiserv, FIS, Jack Henry and Associates and Finastra — and encourage them to simplify the process for their bank clients to create and offer these important products.
Today, Bank On accounts are available in more than 32,500 branches, in 99 out of the 100 largest metropolitan markets and in all 50 states. Tey have received plaudits from bank regulators and policymakers alike — and for good reason. Research suggests that the initiative
is working as intended — according to the Federal Reserve Bank of St. Louis, 75% of consumers opening Bank On certified accounts were new customers for that bank. In addition, although these accounts have widespread appeal, CFE Fund reports that close to 60% of Bank On certified accounts were opened by customers in communities with 50% or more people of color.
Te importance of having a banking relationship has never been more apparent than during the COVID-19 pandemic. From obtaining Paycheck Protection Program loans to receiving economic impact payments quickly, there are countless stories that speak to the benefit of having a trusted banking partner — and to the disadvantages of not having one.
“For a long time, we’d known that we have consumers that don’t have bank accounts
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