The Role of Technology in Serving the Unbanked

Publication Date

March 2005

Author(s)

Marta Rocha, Michael A. Stegman, Walter R. Davis

Client/Funder

Ford Foundation

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Center researchers examine whether banks are using ATM technology to expand services that bring unbanked individuals into the financial mainstream.

With the capital cost of a new ATM machine about one-fiftieth that of a typical bank branch and the average transaction conducted with a bank teller estimated to cost more than three times that of an ATM transaction, there is little doubt of self-service technology’s enduring role in the financial services industry. What remains unsettled is the extent to which this technology will help bring unbanked individuals into the mainstream banking system, or continue to serve primarily as an access point to non-bank financial services.

This paper presents preliminary findings from an ambitious attempt to determine whether low-income and minority communities are fairly served by ATMs.