Despite the increase in mobile banking, nationwide closures of bank branches during the pandemic leaves underbanked and unbanked communities further behind.

The COVID-19 pandemic has impacted everyone's life in some way or another. One of the direst effects has been the financial impact that has resulted from job layoffs and mandated quarantines. The closing of bank branches across the United States reflects the economic impact many have had to endure. Unfortunately, those branch closures have only caused the unbanked and underbanked communities to be left further behind in a banking system that has historically overlooked them or has not provided fair financial access and opportunities.


According to S&P Global Market Intelligence, a record-breaking number of 3,324 net bank branches closed down nationwide in 2020. The recent closures bring the total number of branches closed to over 13,000 since the start of the Great Recession in 2008. The decision to shut down physical locations has been expressed as a necessary financial decision for many traditional banks considering the overhead costs of operating a branch location. Before the pandemic, some banks were already starting to close their doors due to bank regulators enforcing the inability for banks to charge excessive amounts of fees. Despite many traditional banks still charging fees for overdraft and not meeting minimum balance requirements, the inability to charge excessive fees has made it less profitable for bank branches to operate.




The additional and continuous bank closures have left rural and underserved communities in the fists of alternative financial services, including payday lenders, check cashing stores, pawnshops, and title loan companies. These predatory lending services continue to perpetuate a cycle of keeping low-to-moderate income households in constant debt.


Many consumers have had to adjust how they bank and who they bank with due to the thousands of traditional bank branches that have closed down. Those consumers are now using their smartphones and computers to access and utilize their banking information. According to a Fidelity National Information Services survey, Baby Boomers, Gen Xers, and Millennials are increasing their mobile banking usage and taking advantage of their current banks' digital services. Others are switching to or starting new accounts with neobanks, also known as digital-only mobile banks. However, those in rural areas, those in areas that lack reliable or any Internet service, or those not familiar or trusting of technology are amongst the unbanked and underbanked communities most impacted and left further behind by the closing of even more bank branches.


The role that CapWay plays in being a solution.


We are all tasked with the daunting question of, "How can we fill the void in the hardest-hit communities?" CapWay, a neobank and financial technology service provider that was started due to its founder's experience of growing up in an underbanked community, aims to answer this question by providing innovative, needed, and deserved financial services to unbanked and underbanked communities.


CapWay services include the following three core banking options:

- A Money Account that comes equipped with a physical and virtual debit card

- Money Goals, the ability to save towards financial goals

- Sending and receiving money; P2P transfers


In addition to its free financial education content, CapWay also offers a financial literacy curriculum, called Phunds, to community organizations, schools, municipalities, service providers, and more.


CapWay's mission to bridge the gap in a growing cashless economy for those who have been underserved, overlooked, and misunderstood by the traditional financial system. To start a Money Account with CapWay or learn more about its financial service offerings, you download the CapWay app in the Apple App Store or Google Play Store or visit www.CapWay.co.

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Resources:

https://www.npr.org/2021/03/26/979284513/what-are-we-going-to-do-towns-reel-as-banks-close-branches-at-record-pace

https://ncrc.org/research-brief-bank-branch-closure-update-2017-2020/

https://www.investor.fisglobal.com/news-releases/news-release-details/covid-19-rapidly-reshaping-consumer-banking-and-payments

https://finledger.com/2021/01/11/banks-are-shuttering-branches-left-and-right-heres-why/


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The CapWay, Inc Debit Visa Card is issued by Metropolitan Commercial Bank (Member FDIC) pursuant to a license from Visa U.S.A. Inc. “Metropolitan Commercial Bank” and “Metropolitan” are registered trademarks of Metropolitan Commercial Bank ©2014.

1. Account holders will be allowed to overdraw their account up to $25 on debit card purchases. Debit cards will go into freeze until funds are deposited to bring account back to current. See terms and conditions

2. Sending or receiving money from other CapWay account holders will be instant. Transfers from other accounts could take up to 48 hours, depending on the financial institution.

3. Early access to funds requires direct deposit. Early payment is not guaranteed and is dependent on the timing of payer's submission of deposits. We generally post such deposits on the day they are received which may be up to 2 days earlier than the payer's scheduled payment date.

4. Money Goals allows account holders to save money towards financial goals created within the CapWay platform. Funds can be transferred from your Money Account or saved through the rounding up of your transactions from purchases.

5. CapWay offers financial content through Learn Money free of charge, but may include advertisements through affiliates. Phunds, CapWay's literacy program and session, is paid content or co-branded content.

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