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Report reveals depths of alternative banking industry

Mar 22, 2011 Brian Bradley

With millions of Americans suffering through a loss of buying power and personal wealth, it should be no surprise that the alternative credit market has grown leaps and bounds in recent years. According to a recent report from Research and Markets, American consumers who are considered "underbanked" spend approximately $10.4 billion on about 324 million alternative financial services. Research and Markets considers underbanked consumers as those who are "reluctant to use traditional banking products," including debit and credit cards, out of concern for fees and other underlying costs. Instead, this segment turns to alternative credit and banking sources at short-term lending outlets. Research and Markets claims its new data will provide an important source for the numerous verticals in the financing industry. "The objective of the report is to provide vital marketing information about the underbanked that also use AFS products; and the traditional and novel banking and financial services that banks can render to them. The report will provide new insights and give recommendations for banks intending to capitalize on this untapped market segment," the agency said in a statement. Such means of obtaining credit can help consumers reconstruct their credit scores through alternative sources like the PRBC credit rating