Head of Equifax Foundation Talks Financial Inclusion with Authority Magazine

 

At the core of the Equifax purpose is helping people to live their financial best. That’s why we’re constantly innovating our solutions to promote greater financial inclusion and empower consumers to take their financial situations into their own hands. 

Recently, our own David Stiffler, President of the Equifax Foundation and our Corporate Social Responsibility (CSR) leader, sat down with Orlando Zayas, CEO of Katapult for Authority Magazine, who is working on a series about companies that promote financial inclusion. Together, Stiffler and Zayas take a deep dive on the principles of financial inclusion and how Equifax strives to support unbanked and underbanked consumers.

Here’s an excerpt from the interview:

Zayas: What exactly is Financial Inclusion?

Stiffler: The World Bank defines financial inclusion as access to useful and affordable credit products/services that meet an individual’s needs and are delivered in a safe/responsible manner. Financial inclusion is about ensuring everyone has access to basic financial services regardless of their income or socioeconomic status. I’d more specifically point to exclusion, especially in America, where exclusion has fallen and continues to fall along racial lines and has meant exclusion from credit, from banking, from housing and from insurance.

Zayas: What does it mean to be “unbanked”?

Stiffler: People who are “unbanked” are those who don’t use traditional financial services such as credit cards and bank accounts; instead, they rely on alternative financial services, such as check cashing services, money orders and payday loans, which are often expensive.

Zayas: For the benefit of our readers, can you explain some of the typical reasons why a person might be unbanked? Why can’t they just walk into the local bank and open an account? Why can’t they simply open an account online?

Stiffler: There are many reasons why a person may be unbanked: lack of access, unemployment, minimum balance requirements, distrust in financial institutions, lack of steady income, unable to meet minimum daily balances, etc.

Some unbanked consumers just don’t have access to nearby bank branches in their communities (as many have closed), or the banks have limited hours of operations for those consumers who work different shifts.

There are some great online banking options out there, but many don’t have adequate or reliable access to the internet. So, if someone doesn’t have consistent access to the internet, that presents a challenge. And it can also be challenging to conduct business with an online-only bank.

There are a handful of challenger or neo-banks on the rise out there. Killer Mike and team made waves when they announced Greenwood Bank a few years back, but at Equifax, we are proud partners with Mobility Capital Finance (MoCaFi) that is working to safely get consumers and whole communities safely banked and on a stronger pathway to financial safety and resilience.

Zayas: This may be obvious to you, but it will be helpful to spell this out. Can you articulate to our readers a few reasons why it is so important for businesses to promote financial inclusion?

Stiffler: Great question! So many reasons come to mind, but a few that resonate with me are that employees and consumers are demanding more from their employers and preferred brands, especially as it relates to those employers’ and brands’ commitments to issues around equity and financial inclusion. Moreover, exclusion, in purely business terms, is bad for business. Greater financial inclusion means bigger markets! If you’d asked me this question a decade ago, I would have said that it’s the right thing for businesses to do. But if we think along the lines of stakeholder capitalism, there’s every reason to believe we can build a more inclusive economy that is just and profitable.

Removing barriers to financial inclusion isn’t something financial institutions can do unilaterally. To succeed, the effort must involve the entire ecosystem working together. Because financial security remains a significant hurdle for far too many, it is imperative that financial institutions, businesses, communities, and policymakers all work together, rethink traditional models, and enable credit access and financial inclusion in innovative ways.

To read David Stiffler’s full interview, click here.