This 2016 landscape analysis frames financial inclusion as a national challenge, with 57% of U.S. households struggling financially and 28% underbanked or unbanked. Black and Hispanic families, low-income, younger, and less educated households are disproportionately affected, with many forced into high-cost alternatives like payday loans carrying 391–521% annual interest rates. The paper highlights how fintech is unbundling traditional banks, with startups innovating in single products but creating lasting value by bundling solutions that address day-to-day management, income volatility, and long-term mobility. Key trends include big data for alternative underwriting, mobile adoption (32% of underbanked use mobile as their primary channel), and employer distribution as a path to scale underserved access
Impact potential is substantial: in 2013 underserved households generated $103B in fees and interest on $1.3T in financial products, underscoring the commercial upside of providing lower-cost, inclusive solutions. Constraints include continued consumer reliance on cash, the fragmented payday and auto title loan markets, and persistent mistrust of formal finance. Tailwinds come from mobile ubiquity and venture-backed fintech experimentation supported by funders like CFSI, Omidyar Network, and Core Innovation Capital. Example startups include Oportun, which has loaned $1.5B to over 500,000 Hispanic borrowers while helping build credit; PayNearMe, which enables cash-based bill payment at 17,000 locations; and Even, which stabilizes volatile incomes for hourly workers with a flat-fee model.