Demand for and use of Bank On increased in 2020, according to recently released data from the Federal Reserve Bank of St. Louis.
The report analyzed data from 17 commercial and retail banks on account openings, usage and consistency, and online access. According to the report, more than 8.4 million Bank On-certified accounts had been opened as of 2020. More than 3.8 million accounts were open and active — approximately 80 percent of U.S. ZIP codes, an increase from 65 percent in 2018. More than 8-in-10 Bank On accounts opened last year were by customers who were new to their financial institution. More than 7 million U.S. households — 5 percent of the overall population — are unbanked, according to the Federal Deposit Insurance Corp. Another 22 million are underbanked.
The report found that Bank On account-holders were active: Nearly 64 million debit transactions were processed on average per month at participating institutions — 26 per account-holder. According to the Fed, that created an average of more than $2.4 billion in debit transaction value per month. Also, more than $43 billion was deposited into those accounts in 2020, an average of six deposits per month per account holder. Nearly 4-in-5 Bank On customers were digitally active.
BankOn, an initiative through the The Cities for Financial Empowerment Fund, is intended to improve the financial stability of unbanked and underbanked Americans. It includes locally led partnerships between local public officials; city, state and federal government agencies, financial institutions and community organizations. Those groups help connect the unbanked and underbanked to Bank On-certified accounts.
“This report helps quantify the national impact of Bank On and how consumers are opening and using safe, affordable transaction accounts,” said Daniel Paul Davis, vice president of community development and the community affairs officer at the St. Louis Fed. “The use of these accounts demonstrates the market for Bank On-certified accounts.”