Hsu urges banks to rethink processes to expand access

To continue to expand financial access, banks need to innovate and consider adjustments to their screening processes, Acting Comptroller of the Currency Michael Hsu said today at the Bank On National Conference. Hsu noted that progress has been made in reducing the number of unbanked in recent years, but 5.9 million U.S. households remain outside the banking system, with higher unbanked rates among those with lower incomes and less education as well as those who are young or Black and Hispanic, people with disabilities and single mothers.

Banking innovations and adjustments could include accepting more forms of identification, streamlining remote account opening, partnering with benefits providers and employers, and training bank frontline staff to consistently offer Bank On accounts to new customers, Hsu said. He added that some banks are applying Know Your Customer processes for high-risk accounts to Bank On accounts. “One of the ‘strongly recommended’ features of Bank On certified accounts is the acceptance of alternative forms of identification such as consular identification cards and municipal IDs,” Hsu said. “Bank On also ‘strongly recommends’ that accounts only be denied for customers with past incidences of actual fraud.”

Hsu also urged banks to pay attention to how they measure and manage financial crime risks as they evolve their account opening processes specifically with Bank On accounts “so that those who lack traditional forms of identification or fixed addresses and those who cannot physically visit a branch can still open an account.”