- Posted by FactorTrust
- On September 18, 2014
By Greg Rable
I just heard an old Korean saying that simply states, “It is dark under a lamp.” That concept—that a lamp illuminates everything out in front of it but can’t shed light on what lies just beneath—helps remind us that we don’t always need to look far for the answers we seek. Sometimes they can be nearby, right beneath our noses. When it comes to competing for and analyzing underbanked consumers—70 million people and counting in the United States—we cannot rely on traditional credit reporting to reveal valuable insight on them. That insight exists, however, even though it’s not obviously illuminated by mainstream sources. In order to find it, we have to look in another place: the alternative data landscape. And the good news is that this readily accessible wealth of information sits right beneath the proverbial lamp.
Who are the Underbanked?
Let’s first step back for a second and define the underbanked. They are typically consumers who often have existing banking relationships—usually a checking account—but do not utilize traditional credit options either by choice or due to past credit challenges.
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