Bank On National Data Hub: Findings from the First Year

Since 2009, the FDIC has conducted its National Survey of Unbanked and Underbanked Households to assess the number of U.S. households without a bank account at an insured institution, as well as those who have a bank account, but have accessed alternative financial services in the last 12 months. The estimate of households that are unbanked or underbanked is currently at its lowest point. However, the survey notes that millions of Americans are still operating their households and businesses on the sidelines of the financial mainstream because they feel they either “do not have enough money to keep an account,” “don’t trust banks,” or, “bank fees are too high and/or unpredictable.” The purpose of the Bank On movement is to improve the financial stability of unbanked and underbanked individuals and families by making safe, low-cost transaction accounts available and accessible to all. A way in which the movement reaches its target markets successfully is by professionalizing banking access efforts for both financial institutions and their customers. Paramount to the professionalization of such efforts, is high-quality data showing the take-up and usage of Bank On certified accounts. In line with the Federal Reserve’s Bank of St. Louis promotion of inclusive economies, the CFE Fund and the St. Louis Fed launched a pilot study to examine the activity of certified accounts from four institutions (Bank of America, JPMorgan Chase, U.S. Bank and Wells Fargo). In addition, the pilot tested how a centralized Bank On data collection process could operate and ultimately informed the design of a national reporting platform for all financial institutions offering certified Bank On accounts. National Bank On account data reflects the maturation of this movement – standardized, national data, aggregated by a federal regulator, allows stakeholders to better understand the market at national, regional and local levels. The understood impact of Bank On certified accounts, as well as the success of central reporting, led to the St. Louis Fed’s establishment of a national, centralized reporting infrastructure – the Bank on National Data (BOND) Hub. Building on the foundation set by the pilot study, the St. Louis Fed officially launched the BOND Hub and invited financial institutions with certified accounts to submit their 2018 account data. A total of 10 institutions submitted data to the BOND Hub, including the four pilot banks as well as six community banks (Carrollton Bank, First Commonwealth Bank, IBERIABANK, Old National Bank, Southern Bancorp and The First – A National Banking Association). The institutions were each asked to submit their 2018 account data on 23 metrics related to account openings, account usage and consistency, and online access. Based on the pilot experience, some minor adjustments were made to the 2019 collection procedures. With this newly launched national reporting infrastructure, financial institutions can better understand, and benchmark, the performance of Bank On certified products and use this information for regulator examinations of their community services. In addition, products certified as meeting the Bank On National Account Standards support Community Reinvestment Act (CRA) service test examinations. The CRA Q&A highlights the availability of low-cost deposit accounts, the extent to which they reduce costs, and the degree to which services are tailored to meet the needs of low- and moderate-income (LMI) individuals as supportive of the regulatory evaluations by examiners. For Bank On coalition partners, this data is invaluable in illustrating their local banking access progress, without requiring multiple requests to financial institution partners for data. Coalitions can further illustrate their impact by coupling account information with additional data that they can collect themselves, such as programmatic banking integrations and improved customer experiences. Finally, for the broader Bank On movement and the banking access field, the data represent the next step in growth and professionalization. The ability to quantify the national impact of Bank On, and how consumers are opening and using safe, affordable transaction accounts, is an important milestone for banking access efforts that demonstrates the robust market for Bank On certified accounts.