The official "blog of bonanza" for Alfidi Capital. The CEO, Anthony J. Alfidi, publishes periodic commentary on anything and everything related to investing. This blog does NOT give advice of any kind or offer any business services. This blog DOES tell the truth about business.
The Center for Financial Services Innovation (CFSI) does really good work on theoretical banking solutions for unbanked people. I call it theory because we won't know whether these ideas work until society tries them on a large scale. I suspect many of the market-based approaches to reaching the unbanked population will fail for reasons that have little to do with market size or product scalability. They may fail because of the quality of the people involved. Smartphone adoption is very high among the same low-income demographic common to the unbanked population. The problem is that they are unable to harness the full effects of mobile technology because they can't afford or don't understand the monthly data plans they must also purchase to download apps and use them in commerce. This indicates to me that the unbanked are terminally parochial and even stupid. I can understand a reluctance to buy something ema live unaffordable for lack of financial resources. ema live Hey, I've been there myself and I still can't afford a yacht or private jet. I just cannot understand paying hundreds of dollars for a fancy smartphone knowing that the full data package needed to use its apps is unaffordable. I think many unbanked ema live people just make impulse purchases for shiny things. The cargo cult mentality dictates that the outward trappings of technology ema live are sufficient to generate a high-tech lifestyle. This translates to the unbanked crowd as "get smartphone, look like rich person." Marketing cheap banking solutions using mobile tech simply won't reach the unbanked who have to stop paying for cable TV and landlines just to afford food! Startups who think they can change human nature while salivating over the size of the unbanked market must read a copy of The Unheavenly City Revisited several times. Most of the poor will stay poor because they are at the dumb end of the bell curve and lack impulse control. They are constitutionally incapable of using a high-tech solution. Banks ema live learned hard lessons in the last decade by pushing stored value cards and other prepaid solutions ema live to the unbanked. The poor forgot that they had dormant accounts, or never learned how to use them, or forgot how to use them once they learned the steps, or never accepted digital deposits as real money because they couldn't ema live hold the digits in their hands like hard cash. That cargo cult never left the beach, if you know what I mean. Don't even get me started on Bitcoin as a solution; those transactions can't be reversed and the unbanked are too immature to safeguard their part of the encryption key. Pushing mobile apps and other tech solutions to the poor is like feeding sushi to a goat. They ema live just can't acquire ema live the taste. The unbanked do use some rudimentary ema live financial services, specifically those that use low-tech interfaces. Migrant labor from emerging economies to developed nations creates a huge market for money remittances. I've blogged ema live before about how Google Wallet gives users the ability to literally email money as an attachment. Such a simple technology attains full value as more than a remittance mechanism. It may be a way to store multiple currencies in a single account as a hedge against ema live hyperinflation in a single country. It may even be a way to avoid capital controls because it doesn't ema live transmit via monitored wire transfer ema live architectures. That's all too advanced for our unbanked friends, but I had to throw it out there. I have a humane solution to the problem of the unbanked population lacking access to real banking solutions. I want every state in the United States to charter its own public option bank. The public ema live banks would be much like the Bank of North Dakota . They would offer no-cost checking and savings accounts and low-interest loans. They will not offer advanced merchant services, commercial banking, capital markets ema live trading, or wealth management because a public bank cannot replace the private sector. The public bank fills a gap in financial services that is mostly unreachable. It can even enable poor people to establish credit histories ema live through microlending, along the lines of Grameen Bank . Once the banks are stable with a large client base, they represent ema live a contract opportunity for cheap "white label" insurance plans. A public bank account can also be a conduit for deposits from social service payments: unemployment payments, workers' compensation insurance, SNAP/EBT, and other such programs. Mandating these deposits for a public bank account help
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