‘Branch deserts’ hurt key markets even in mobile banking era

The lack of convenient bank and credit union branches is affecting many communities, according to an analysis of four key urban markets. While digital channels might seem like an alternative, online and mobile banking access may be a challenge to low-income consumers too. Local banking service really matters in American cities.

How is a bank or credit union branch like a supermarket? Both branches and grocery stores nurture a geographic area, each in their own way.

United States government agencies such as the Department of Agriculture and the Centers for Disease Control define “food deserts” as low-income urban neighborhoods that lack supermarkets or other venues providing convenient access to affordable, healthy foods. The agencies specifically study such areas because residents there often lack accessible healthy food options. As a result they become more vulnerable to obesity, heart disease, diabetes and an array of related maladies.

If the lack of nutritious grocery offerings in food deserts can threaten physical health, then it is plausible to presume a lack of convenient banking offerings may threaten families’ financial health. Further, if those conditions prevail more in low-income neighborhoods, the lack of access is likely harming those most in need of financial counsel.

My firm has studied “banking deserts,” low-income urban neighborhoods with limited access to banks or credit unions, and the findings can help as the industry weighs the future role, and existence, of branches.


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