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Watering the financial desert

Gareth Ross

Posted on August 21, 2018

Gareth Ross is Chief Digital and Customer Experience Officer for MassMutual.
Aerial view of Frayser, a neighborhood in Memphis Tennessee

Today, 16 million adults don’t have any type of bank account.Twenty-three percent have borrowed money from a place like a pawn shop or payday lender.Across the United States, this lack of access to basic financial systems and tools conspires to ensure that countless low-income communities stay low income.

There’s a lot we can and must do to address this problem. After all, think of the amazing things we can do today:

  • Doctors can 3D print artificial limbs for amputees.
  • Machines can learn for themselves.
  • Drones can deliver your groceries.

Every day we see new innovations that amaze us. It’s truly an “age of amazement” that gives us confidence in our ability to make our society better.

So let’s take that innovation to places like Frayser, Tennessee.

A community in north Memphis, Frayser was built around the railroad in the late 1800s. Throughout the 20th century, it grew quickly. Big factories moved in. Businesses, schools, and services came with them.

But by the 1980s, those plants had closed down. People left the community. Businesses stopped investing. Today:

  • Eighty-five percent of all children in Frayser qualify for free or reduced price lunch.
  • Frayser’s per capita income is lower than around 99 percent of neighborhoods in this country.
  • The majority of its jobs are part time or temporary.

Frayser is an example of a financial desert. People in this community don’t have access to, don’t trust, or don’t know how to use financial services that most Americans use regularly. It’s a place with just two banks, but 16 alternative financial service providers ― places like pawn shops and same-day lenders. It is a place where pretty much everything ― rent, paychecks, groceries ― is done in cash or by money order to prevent checks from bouncing.

For many people, this creates a vicious cycle that makes them less financially secure with each passing year. If your only option is to pay your rent by money order, that costs you extra money. If you need money after a family emergency, you might get a payday loan with an annual interest of 400 percent.

Without a traditional network of financial support, you’re also especially vulnerable to predatory lending. It’s all but impossible to save for college, plan for retirement, or prepare for so many of life’s biggest, most challenging moments.

And Frayser is far from the only community that has these challenges.

There’s a lot we can and must do to address this problem. But above all, it starts with people. People helping each other out. People investing in each other. People opening up new opportunities for others ― and coming up with new solutions. When people have somewhere reliable they can turn when they’re making critical decisions about their future, or just figuring out what options they have and how to use them, it matters ― a lot.

The good news is, businesses can help. It might mean making concerted efforts to expand our services, financial and otherwise, to underserved places. It might mean working with community leaders and activists to pilot programs that address longstanding problems.

For instance, can we create opportunities to help small businesses get access to capital? Can we focus on lending and banking practices ― like the way credit scores and banking fees are calculated ― and come up with innovative solutions that benefit these communities?

As we do this work, it’s important to remember that technology is a tool, not a singular solution. That means we can think broadly about how to address these challenges. We can figure out how to use the power we have to bring people closer together. We can build stronger communities where people lift each other up. The only question is: are we up for the challenge?

As leaders of industries working to expand the limits of what’s possible, it’s up to all of us to consider how to help the people being left out and left behind in our country. Together, we can build stronger communities ― with financial services and networks people can count on. Because when we pool our efforts, we can ensure that the age of amazement truly is amazing for everyone.


Learn more from MassMutual…

The link between community and financial well-being

Financial independence needs interdependence



Federal Deposit Insurance Corporation, “FDIC National Survey of Unbanked and Underbanked Households,” Oct. 20, 2016.

Federal Reserve, “Report on Economic Well-Being of U.S. Households in 2016-May 2017,” June 14, 2017.

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