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Partnerships You Can Bank On: Sustainable Financial Institution Engagement in Bank On Programs

Among financial access initiatives, Bank On programs have become the fastest growing strategy to connect unbanked consumers to free or low-cost starter or “second chance” accounts. These programs are voluntary, public/private partnerships between local/state government, financial institutions and community-based organizations. A key assumption underlying the Bank On model is that financial institutions are able to serve these consumers in a way that is sustainable to their business operations. Because financial institutions are the scale platform for the Bank On model, their desire and ability to meaningfully participate in these programs over time is critical to the success and longevity of the Bank On approach.

In April 2012, CFED released a report, Partnerships You Can Bank On: Sustainable Financial Institution Engagement in Bank On Programs, that for the first time investigates the extent to which financial institution engagement in Bank On programs has been successful from the perspective of the participating financial institutions, and to recommend ways to strengthen that engagement in sustainable ways.

CFED’s research – based on extensive document review and interviews with financial institution executives and other Bank On stakeholders – indicates that in order for Bank On programs to continue to expand and attract participation from financial institutions, key aspects of the program need to be standardized and streamlined. We also find that many institutions are unresolved as to whether or not Bank On participation truly presents a business opportunity, or if it is ultimately and primarily a charitable and community relations activity. This distinction, and how financial institutions resolve it, is of great importance to the future of the Bank On field.

This research was made possible through the generous support of JPMorgan Chase.

Download the full report here.

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