Households that are “unbanked” represent 6.5% of all those in the country, the federal insurer of bank deposits reported Tuesday – the third straight period, it said, the percentage has declined.
At the same time, the agency reported, mobile banking has increased at a “striking” rate.
In its 2017 biennial National Survey of Unbanked and Underbanked Households (the latest survey results released), the Federal Deposit Insurance Corp. (FDIC) said the unbanked rate of 6.5% rate was the lowest recorded since the agency began conducting the survey in 2009.
The survey from 2015 found 7% of households were unbanked, down from 2011 results of 8.2%.
“Unbanked” means adults in the household do not have a checking or savings account at a financial institution. In numbers, the FDIC said, its survey results mean 14.1 million adults in 8.4 million households do not have the accounts.
The agency said the declining rate was attributable – “almost entirely” — to “socioeconomic circumstances of U.S. households.”
The FDIC survey results also covered “underbanked” households (meaning those households that had an account at an insured financial institution, but which also obtained “financial products or services outside of the banking system”). The number of underbanked households was down in 2017, the agency said, to 18.7% (or 48.9 million adults in 24.2 million households). In 2015, according to the report, 19.9% of households were counted as “underbanked.”
“Consistent with previous surveys, banking status in 2017 varied considerably across the U.S. population,” the agency said in a release. “For example, unbanked and underbanked rates were higher among lower-income households, less-educated households, younger households, black and Hispanic households, households headed by working-age individuals with a disability, and households with incomes that tend to vary from month to month.”
For mobile banking, the FDIC noted that method “continues to become an increasingly important way for consumers to access their accounts,” largely at the expense of tellers in banks – except for those with higher unbanked or underbanked rates.
In 2017, the agency said, mobile banking was used by 40.4% of banked U.S. households to access their accounts. That’s nearly double the 23.2% of four years earlier, the FDIC said.
“The results show that use of mobile banking continued to increase sharply, while use of bank tellers declined,” the report states. Use of bank tellers, however, remained quite prevalent, particularly among segments of the population that had higher unbanked and underbanked rates, the report states.
The report notes that 73.6% of banked households used bank tellers to access their accounts in the past 12 months, “a higher proportion than any other method asked about in the survey.”
However, use of bank tellers declined modestly between 2013 and 2017, while use of mobile and online banking increased, the report states. “The growth in the use of mobile banking was particularly striking, rising from 23.2% in 2013 to 31.9% in 2015 and 40.4% in 2017,” the report states.