Bringing financial services to the underserved

Miami’s economy continues to rebound from the Great Recession. The growth in tourism, real estate, jobs and population has been remarkable.

Unfortunately, not everyone is sharing in our economic revival. With the second-highest level of income inequality of any large county in the United States, too many of Miami-Dade’s residents continue to live at or below poverty.

This issue has many roots, but a significant factor is a lack of access to banking, credit and other traditional financial services. In the Miami-Fort Lauderdale area, more than 21 percent of residents are considered financially underserved, meaning they lack full access to traditional banking services. This problem is even more significant in minority communities.

How do these people accomplish what those of us with bank accounts take for granted, like paying bills or shopping online? Traditionally, they have had to rely on alternative financial services — check cashers, money orders and payday and car-title lenders. These services can be extraordinarily expensive, with interest and fees to access money accounting for almost 10 percent of their income.

Fortunately, new products and technologies are available to help the financially underserved avoid these predatory practices. For example, an increasing number of employers are paying their employees with payroll cards instead of paper checks. Workers can also use private, prepaid cards to receive their wages via direct deposit.

This saves employers the cost of issuing checks and serves as an entry point for unbanked workers to receive the benefits of electronic payments.

While several technologies exist, the challenge is getting them into the hands of the financially underserved, and ensuring that they remain safe, reliable and affordable. One such effort working to achieve these goals, of which I am a part, is being led by MasterCard.

The Master Your Card community empowerment program is working with local groups, including the South Florida Hispanic Chamber of Commerce and the South Florida Community Development Coalition, to provide information about available financial tools and technologies and education about how to effectively use them. This education process is critical and is coupled with strict industry standards that build trust and ensure that the technologies aren’t misused and deliver real benefits.

I’m pleased by our positive economic recovery and I urge everyone to embrace the technologies that are available today that can keep us on this positive trajectory. I will only be truly satisfied when we create true economic opportunity for all of our residents.

This story was originally published August 5, 2015 at 8:00 PM with the headline "Bringing financial services to the underserved."