4. Make a match with partners who can help you.
In underserved markets, the right partnerships and alliances can help lower costs, increase sales, and reduce difficulties in gaining regulatory approvals.
Union Bank was seeking to expand its provision of financial services to underserved markets in the United States. Initially, Union Bank entered the markets on its own, by creating a Cash and Save program, which included check-cashing as well as more traditional banking services. The program was targeted at low-income individuals and piloted in 13 bank branches and retail settings in California.
The initial results from this innovation were not as positive as had been hoped. The check-cashing services located in the Union Bank branches did not attract the planned volume of customers. But then a chance to invest in Nix Check Cashers provided the opportunity to make a match with a company that already had provided successful innovations in these markets. In 2000, Union Bank bought a partial ownership interest in Nix Check Cashers. The two companies also established a partnership with Operation Hope, a nonprofit specializing in financial education for low-income consumers. Together, the three organizations were able to help one another develop an innovative range of product offerings that were attractive to low-income consumers. These products included check cashing, savings, financial education, and ATM facilities, all geared to work together to meet the needs and interests of these consumers.
By 2003, 31 joint facilities had been opened, and thousands of profitable new customers had been added by the partnership. Consumers in underserved communities benefited because they were getting access to a much broader array of financial services and paying less for most of them as well. Union Bank is in the process of expanding the innovation to other sites across its network.
