The key stat: Roughly 80% of non-Black credit unions in the US offer an informational website and online banking services. That number falls to just about half among Black credit unions, according to an Urban Institute study.
Why the gap? The study offered two hypotheses about why there’s such a large tech gap.
Tech access is necessary: Black consumers have historically been underserved by non-Black FIs and rely heavily on Black FIs to access credit and build generational wealth.
But the growing tech gap is putting these FIs and their consumers at a further disadvantage.
Getting what they need: A handful of groups and programs have popped up to get these FIs up to speed with the resources they need.
Our take: Black FIs also face competition from new banking entrants like fintechs and neobanks. But the new challengers may not be all bad.
Many affinity-based fintechs and neobanks build their operations around community and support the “Bank Black” movement. This could present an opportunity for these digital disruptors to partner with Black FIs to share not only digital capabilities, but financial learning programs, networking opportunities, and small-business advice, with the same end goal of empowering Black consumers to take control of their financial lives.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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