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Financial Inclusion: Progress and Future Prospects

Financial inclusion is becoming a reality for more Americans. While there’s still a long way to go to ensure everyone has access to financial services that meet their needs, many organizations have prioritized this vital issue in 2023 and beyond.

Current State of Financial Inclusion

The national conversation around diversity, equity, and inclusion continues to expand, with financial inclusion for consumers being a key component. Financial inclusion means people can safely and easily access the essential services, tools, and systems they need to manage their financial lives and reach their goals.

When people are excluded from the financial system, they may lack a safe place to store their funds, a reliable way to cash checks, a secure way to make payments or transfer money, access to loans at reasonable rates, and basic financial literacy. According to a 2021 Federal Reserve survey, 18.7 million U.S. households were underbanked, and 5.9 million households didn’t have a checking or savings account at a bank or credit union.

The Color of Financial Exclusion

The ability to build wealth is crucial for financial health and stability, not only for individuals but for entire communities. The impact of financial exclusion isn’t distributed equally. Data shows that communities of color are harder hit compared to their white counterparts. For example, while 13% of white Americans are unbanked or underbanked, 29% of Hispanic adults and 40% of Black adults are.

Progress in Financial Inclusion

The good news is that even slow progress is still progress. The proportion of unbanked U.S. households in 2021 was just 4.5%, the lowest since the FDIC’s National Survey of Unbanked and Underbanked Households began in 2009. Changes in economic status, work focused on increasing financial literacy and inclusion, and advances in technology and digital offerings have all contributed to this decrease.

Looking Forward: Financial Inclusion in 2023 and Beyond

While there’s much still to be done in the financial inclusion space, the overall direction is positive. Most experts and activists agree that moving the needle in the right direction requires a nuanced and multifaceted approach. Solutions need to be driven by public policies and include layered investments between the public, private, and philanthropic sectors.

Tools and Resources Bringing Financial Inclusion to More Americans

As awareness grows around financial inclusion, the variety of resources has increased to help individuals build stronger economic foundations and achieve their goals. Some key initiatives include:

• Bank On: Dedicated to helping financial institutions connect consumers to safe and affordable bank accounts.
• BankBlackUSA: Focused on helping underserved communities connect to black-owned financial institutions.
• Experian Go: Helps people with no credit history establish a credit report and get access to credit-building opportunities.
• Operation HOPE: One of the leading organizations in the financial inclusion space, focusing on financial literacy and economic opportunity.

Whether through the establishment of new programs or technologies, the future of financial inclusion initiatives is bright as partners work together to provide more people with access to secure financial products and literacy.

For any mortgage-related needs, feel free to call O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with confidence.

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