Europe’s unbanked millions

New research has been released that suggests more than 138 million Europeans are not part of the formal banking sector.

This figure is more than the combined populations of the UK and France. So, who and where are these unbanked people?

The report, by MasterCard, challenges received wisdom that exclusion from the financial system is just a problem for developing markets or the unemployed. A third of the 138 million Europeans without a bank account or payment card are employed, and 35% are in the tech-savvy millennial age group.

However – possibly unlike developing markets – it seems that choice is a major factor in Europe. A fifth of the 138 million don’t want a bank account at all, and a further 10% say they don’t trust banks. So, while legislation mandates that banks provide basic accounts to everyone, a significant group simply doesn’t want them.

The challenge, then, is how to bring these consumers into the financial system in a way that works for them, whether through smarter communications, education, or building modern products that give them the functionality they need without the baggage.