Brief Boosting the Technological Infrastructure of Black Minority Depository Institutions Is Critical
Michael Neal, Amalie Zinn, Linna Zhu
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Black depository institutions, covering both credit unions and banks, have long served neighborhoods, organizations, and individuals of color and have sought to help them build savings and wealth. But Black depository institutions are less likely than nonminority depository institutions to offer online and mobile banking services, a key factor that may limit their service and impact. The disproportionate lack of key digital banking service offerings by Black depository institutions is glaring, as it takes place against the proliferation of digital banking across the financial services sector, facilitated by technological change, the recent pandemic and the greater technological usage among younger generations. And it suggests that expanding financial inclusion is critical not just for closing demand-side racial inequities (e.g. the un- or under-banked), but those on the supply side as well. Although greater technological adoption may require additional risk management and it may not be the only panacea for the hurdles they face, improving Black depository institutions’ technological apparatus amid the current financial services landscape can help them more efficiently continue serving their communities.

Research Areas Economic mobility and inequality Wealth and financial well-being
Tags Black/African American communities Community development finance and CDFIs Finance Financial knowledge and capability Financial products and services
Policy Centers Housing Finance Policy Center