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Banks on Wheels: Helping Underserved Communities

Banks on Wheels: Helping Underserved Communities
Lauren Ward
Lauren WardUpdated September 5, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
In an effort to provide equal banking to underserved communities across the U.S., some financial institutions are abandoning the traditional brick-and-mortar approach and are instead taking their services directly to potential customers via banks on wheels. A bank on wheels may not sound like a secure place to keep one’s money, but with digital banking improving as much as it has in the past decade, mobile banking vehicles are legitimate alternatives. Their purpose, however, is also about education, not just banking. In this article, we’ll further explore the purpose behind mobile banking vehicles and why they are needed in certain parts of the U.S.  

What Are Banks on Wheels?

Banks on wheels, or mobile banking vehicles, are often outfitted RVs that come with every feature expected with a traditional brick-and-mortar bank. Customers can access their money via ATMs, open a savings account, deposit checks and cash, and speak with financial specialists about loans or other services the bank may offer. While it may sound strange and unnecessary, the reality is that these novel setups are very much needed in some communities where traditional banks are unavailable or participation is low. 

The Purpose of Mobile Banking Vehicles

Helping underserved communities is the primary purpose behind mobile banking vehicles, but each community may require the services of a bank on wheels for different reasons, including: 

Serving Banking Deserts

In some locations across the United States, there simply may not be enough of a demand to warrant having physical banks, which is why some banks have to close their doors. When this happens, mobile banking vehicles may be the solution. Mobile banks do not require many employees to operate and can be retrofitted with a generator and satellite internet. By doing this, communities in “banking deserts” can access modern banking conveniences without having to travel for extensive periods of time. Recommended: What Checking Accounts Are & How They Work

Educating Communities

One of the reasons some communities won’t use traditional banks may have to do with mistrust. They may not know about FDIC and NCUA insurance, or perhaps they feel banks have preyed upon community members in the past (whether in the United States or elsewhere). Each community’s history with banks is different. Mobile banking vehicles can help heal the divide that exists between some communities and financial institutions by going to certain community events. Here they can explain the differences between checking and savings accounts, give savings account overviews, or explain savings account fees and how to avoid them.Educating communities who don’t trust banks is a crucial first step to establishing a healthy relationship. Fortunately, this can be done via mobile banking vehicles.       

Disaster Relief

If an area is affected by a hurricane, earthquake, or flood, a mobile banking vehicle can provide relief in some situations. As stated, mobile banking vehicles are often equipped with mobile internet and ATMs. Because of this, they can help people access their cash when other options have been taken away due to a loss of power and internet. For example, if a business has lost power but is still selling much needed supplies, it may be forced to only take cash transactions. Banks on wheels can be sent in such situations to help people get access to the supplies they need the most.  

Serving Non-English Speaking Communities

One reason certain communities may not work with local banks is because the employees don’t speak their native language. When this occurs, another banking chain with properly trained employees who do speak the language may be needed. Another thing to keep in mind is that not every country in the world has a proper, trustworthy banking system. For example, bank participation improved in Kenya only recently due to mobile banking. When the U.S. receives immigrants from such countries, education is sometimes needed.    

Maintaining Financial Equity

While the internet should ideally create an environment that fosters the equal distribution of knowledge and resources, it’s unfortunately not always the case. For example, many people view payday loans and check cashing services as legitimate options to remedy their liquid cash needs. When communities don’t have access to credible banks or credit unions, those voids in financial resources are often filled by predatory lendersIn certain parts of the country, payday loans, auto balloon loans, and pawnshop loans can sometimes all be found on a single street. While the appeal may be that those lenders accept low credit and low income borrowers, these loan sharks aren’t doing their customers any favors. Usury often creates debt cycles borrowers are unable to escape.Recommended: What Are Usury Laws and Why You Should CareTo maintain financial equity, the answer is to first educate communities about the benefits of banking services, such as high interest savings accounts and secured personal loans. The next task is to be routinely and consistently available when needed. One way banks are doing this is through mobile banking vehicles. However, many communities do have physical access to traditional financial institutions, yet choose to not utilize them. For these communities, the task once again revolves around education. Because of inflation, people should always make room in their budget for contributions to high interest savings accounts, if possible. These accounts can only be found through financial institutions. 

The Takeaway

Banks on wheels, or mobile banking vehicles, are often outfitted by banks that want to serve communities who are traditionally underbanked. Sometimes these communities simply don’t have access to brick-and-mortar banks, while others may be wary of financial institutions. Whatever the reason, mobile banking vehicles may help alleviate these issues.One huge advantage of utilizing banks, including banks on wheels, is the ability to open a high-yield savings account. These accounts allow you to earn interest on your money.If you’re looking for a high-yield savings account, consider Lantern by SoFi. Lantern lets you compare multiple high-yield savings accounts, including interest rates, minimum balance requirements, and fees, all in one place. Compare high interest online savings accounts and find today’s best rate with Lantern.

Frequently Asked Questions

What is the purpose of the bank on wheels?
How do banks on wheels serve the unbanked?
Which communities use banks on wheels?
Photo credit: iStock/BrianAJackson

About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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