This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to Sonja E. Kelly, Fellow, Center for Financial Inclusion at Accion.

A mentor of mine once told me, “If you want to sell a man lawn seed, talk about his lawn, not your seed.” It’s not hard to see how this applies to financial inclusion. To state the obvious, “If you want to sell a woman financial services, talk about her needs, not your products.” What are her risks? What products does she need at various points in her life? What does she need to know in order to be able to choose the options that best meet her needs?

We often fall into the trap of thinking about banking from the perspective of the banks. Especially now, having come through a financial crisis in which banks maintained a starring role, we frequently hear people equating financial stability with fiscally responsible bank action. But in the end, markets are about people. So an additional part of the product development equation has got to be based on solid consumer-facing research —their lawns, not our seed.

And here are some figures from recent surveys about the “financial lawns” of families in the US:

• Over half of the population in the US with a credit score has what can be considered a subprime score. In some states, that number closes in on 70%.
• One in four Americans either have no bank account, or are considered “underbanked,” meaning even though they have an account, they still use  alternative and largely unregulated financial products and services that are often very costly. In the African-American community, the number of un- and underbanked households rises to one in two, or 50%.
• Nearly half the population isn’t confident they could find a way to scrape together $2000 if they had an emergency.
• Less than half of American workers participate in any form of employer-based retirement plan.

These statistics are evidence of a broken system. That is why CFED advocates for an approach to financial inclusion in the U.S. that incorporates the transaction, credit and savings needs of low- and moderate-income individuals over their life course as a critical part of the input that informs the offerings of the financial services sector. A similar understanding should inform policy solutions so that every individual has an opportunity to save and invest in a better life for themselves and their children. The good news is that if we focus our efforts on meeting these needs of individuals – allowing them to fully participate in and contribute to the mainstream economy – our financial systems around the world will be far more stable as well.

For more information, sign up for updates from the Financial Inclusion 2020 campaign.

Ida Rademacher is Chief Program Officer for CFED. She has over 20 years of experience evaluating programs and policies designed to make markets more inclusive and responsive to the needs of low-income populations.

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