Thanksgiving Is Ruined
March 13, 2009
contemplating the so-called "unbanked"
TiR last "thought about" the unbanked/underbanked in a sustained way circa one year ago. We gathered links, posted nothing.
What got us thinking about them, then?
This: Speedbird's contemplation of the perhaps-death of the "bricks 'n' mortar" banking system.
But -- if a "death," death for whom, where, how? Via what stages?
What, if anything, can we learn from contemplation of the lag populations, if any, who remain quite reliant, at least for the time being, on bricks'n'mortar structures for the execution of at least some "banking"-type transactions?
Who are the "unbanked"?
In the USA, at least, this question unsurprisingly was asked a few years ago by -- a bank. The Federal Reserve Bank of Philadelphia's succinct examination of the q. can be perused here (.pdf) in a report from its 2005 conference summary, "Payment Cards and the Unbanked: Prospects and Challenges."
In late 2006, Credit Union Business magazine asked and attempted to answer the same question, with the addendum "and is their business worth it?"
In spring 2006, The Economist looked at the same population, along with the "underbanked."
Two years ago, the good folks at Davos too spared a moment to quantify and drool over the opportunities for business in handling the financial transactions of the un(der)banked.
[Confusingly, in financial terminology, while individual humans can be "underbanked," it appears that only aggregate geographical or economic spaces can be called "overbanked," or considered to contain "too many banks (in their view) to enable them individually to generate good returns."
A couple summers ago, even the (at the time) ever more world-bestriding Wal-Mart began to move into the un/derbanked's transactions market. Perhaps inevitable follow-up on those efforts can be viewed here and here.
And finally, at around the very time when TiR gathered its data last year, Western Union, Radio Shack and Trumpet (Affinity) Mobile were teaming up to untether from architecture the "unbanked" -- who often swim in a cash if not barter economy -- to bring them one step closer to liberation from the buildings they use: the storefronts that handle international wire transfers, check cashing, bill paying services & e-mail access; the payday loan centers; the Coinstar centers; the pawn shops --- to dematerialize the process for them, elevated (for a price)(or different from/added to the price(s) already paid) nearer the realm of dissolved processing luxury where the "banked" presumably play, and pay.
However, delve deeper into the banking industry's interest in the un(der)banked, and you can begin to develop a suspicion:
How to Think Like a Banker
"Sources of big profit!"
Concern about the potential criminality or terroristic inclinations of unbanked customers can be read, for example, here (.pdf), in a June 2007 newsletter of the International Associations of Money Transfer Networks, and between the lines of the "Testimonials" page on the website of the Financial Service Centers of America.
Some of the banks' literature on the underbanked make them sound more like a paradigmatic, 21st century underclass, a subaltern tier from whom a tidy profit can be extracted, but who must be tightly controlled and closely watched/surveilled. Deployment of new computing technologies is taken for granted as the vehicle through which both agendas will be advanced. As usual, greater convenience (for the customer) is offered, disclosedly or not, in exchange for greater control (over the customer).
Again, TiR's curiosity about the unbanked spiked a year ago. Oh! but what a difference a year makes. Their situation contains several moving parts, most of which, during the past year, have moved.
For example, who on earth would have expected the downgrade of Wal-Mart?
Who on earth would have expected the quantity of, and (with it, TiR imagines) profit from, wire transfers to Mexico to plunge as they have?
[Of course, the magnitude of the feeling that one's financial "expectations" have been disrupted is often directly proportional to the cloudiness of the crystal ball on which one relies.]
Perhaps most intriguingly, however, who on earth -- other, perhaps chiefly, than those in the banking industry -- could have imagined that the banking industry could have deep incentives to bring in and harbor (disclosedly or not) customers who are both sources of big profit and potential terrorists?
Testimony of Madoff whistleblower Harry Markopolos:
When you’re that big, and that secretive, you’re going to attract a lot of organized crime money. Money we now know came from the Russian mob and the Latin American drug cartels.
Herein is another reminder of the confusing speed with which, as so often can happen in various realms of life (especially those ruled by dollar signs), virgules toggle back and forth with/as ampersands.