ATMs: Self-Service for the Unbanked

by Neil Katkov, PhD, November 13, 2002



Tokyo, Japan November 13, 2002

Self-service technology is enabling a new generation of product offerings by banks and other mainstream financial institutions for the unbanked. A new report from Celent Communications, ATMs: Self-Service for the Unbanked, predicts that self-service technology will be pivotal in enabling mainstream financial institutions to capture US$3.3 billion, or 22 percent, of the unbanked market by 2010.

The unbanked and underbanked sectors―representing nearly 33 million US households―have traditionally been served by a variety of alternative financial services providers, including check cashing stores, money transfer services, and alternative credit sources. From time to time, banks have attempted to enter this market, often with disappointing results. Despite this record, the growth of the alternative financial services market and the development of new self-service technologies is leading financial institutions to reevaluate the market opportunity represented by this long-overlooked sector. Banks, credit card issuers and ATM networks are instituting a number of new services, including stripped-down accounts that allow the unbanked to access payroll and government benefits payments, automated money transfer services, and the vending of money orders and prepaid cards.

"It will not be easy to coax unbanked customers into the arms of the banks, but those financial institutions that make a committed, sustained effort will be rewarded," says Neil Katkov, author of the report.  "Over the next several years, financial institutions will become increasingly active in developing new services and products for the unbanked, and will be increasingly successful in winning these customers away from traditional check cashers and payday loan providers."

The report sizes the unbanked and underbanked market in terms of demographics and spending, analyzes the key alternative financial services industries, and presents a number of initiatives by banks and other financial institutions that leverage self service technology to serve the unbanked and underbanked market.  The report contains 19 charts and 8 tables. A is available online.



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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents


  Tokyo, Japan November 13, 2002

ATMS: Self-Service for  the Unbanked

Return to report Abstract


  Why ALIC Doesn't Bank 9
  Consumer Cost Comparison 11
  Basic Banking 12
  Traditional Market Participants 13
  Government Payments 21
  Payroll Programs 25
  Money Transfers 26
  Check Cashing 28
  Advanced-Functionality ATMs 29
  FleetBoston Financial 31
  Star Systems 33
  Standard Bank of South Africa 35
  Partnerships With Corner-Store Incumbents 37




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