According to an article by Rod Newing for the Financial Times, the current economic crisis has considerably increased the need for basic banking services. Newing based his analysis on a report by the World Bank Development Research Group, “Measuring Financial Inclusion: The Global Findex Database”, which claimed that today, 50 percent of the adult population worldwide, a staggering 2.5 Billion people, were unbanked – meaning, they did not have a bank account of any sort. The reasons for this shocking number were manifold:
Of the remaining fifty percent, meanwhile, more and more were looking for the most basic services to be able to at least set up standing orders and have their wages paid in. Unfortunately, as Newing asserted, even this wasn’t always easy.
The reason why so many banks are still hesitant about drawing the attention of the unbanked to their basic bank accounts is that they aren’t making any money on them, contrary to far more lucrative current accounts peppered with overdraft fees, fines for bounced payments and frequently non transparent cost structures. Since banks could not afford to eliminate offering basic bank accounts entirely, the Financial Times article suggested, they were instead keeping quiet about them, pretending as though they didn’t actually exist:
“These accounts are often provided as a result of pressure from governments or as a part of social responsibility agenda. Very few customers will become profitable by improving their credit rating enough for a full-service account”,
“According to MoneySavingExpert.com, an independent website, banks make it bureaucratically difficult to open one, so unless you specifically ask for them by name, the bank staff may not mention the option.”
Instead you will just be given normal bank account application forms, fail the credit score and be rejected.’ The site’s solution is to force banks to offer their basic account to all those rejected after credit checks.
Perhaps disappointed customers should simply consider basic bank accounts a failed experiment and turn towards an eccount instead. Although it does require a monthly fee, this is easily offset by its inbuilt debt control mechanisms and the VISA card attached to it, which allows customers to reap the benefits of online shipping.
According to eccount money’s Will Thomas, the eccount might just be able to sway the mind of the the unbanked:
“We fully understand why someone with a very small income might want to opt for not using a bank account at all. On the other hand, underbanking is a major problem, especially for the financially weak, since it favours short-term thinking and poses a plethora of financial risks.
An eccount can very often save customers valuable money, help them budgeting and assist them with building a better and more sustainable future for themselves. With an eccount, even the unbanked can find their financial home.