The Bank On National Data Hub: Findings from 2021

An estimated 4.5% of U.S. households—or approximately 5.9 million—were unbanked in 2021, according to the newly released Federal Deposit Insurance Corp. (FDIC) report (PDF). This means these households did not have checking or savings accounts at a traditional bank or credit union. The movement to increase safe and affordable banking and bring the underbanked and unbanked into the financial mainstream continues to be a key priority. With additional reporting financial institutions submitting data this year, over all Bank On-certified accounts opened to date almost doubled relative to a year ago.

Each year, the St. Louis Fed invites all financial institutions with accounts certified as meeting Bank On National Account Standards to report data to its Bank On National Data (BOND) Hub. Data are aggregated and released annually. The St. Louis Fed tracks Bank On-certified accounts and their use across metrics in the following categories:

• Account Opening
• Account Usage and Consistency
• Online Access

Refer to our glossary of Bank On data metrics for full descriptions of each metric to assist in interpreting data.

Across the 28 institutions reporting 2021 data, the sample of Bank On accounts studied for each metric represents 35,568 ZIP codes throughout the United States and its territories. The St. Louis Fed also aggregated the data by ZIP code with three or more reporting institutions, a subsample that represents accounts in 26,525 23,780 ZIP codes.This information was updated in June 2023 to reflect that the number of ZIP codes contained in the subsample is 23,780.

The data for each metric in this section were calculated based on the total number of Bank On-certified accounts reported during the 2021 data collection.

The ZIP code level data is essential to local Bank On coalitions for identifying where markets and coalition activity are strong. Overall, more than 14.1 million Bank On-certified accounts have been opened to date. Of those, over 5.8 million accounts were open and active in 2021, and they represent approximately 85% of ZIP codes nationwide.

ZIP Codes Reporting

Account Opening

The purpose of collecting account opening and closure data is to understand the growth and popularity of a type of account. To provide insight into account opening trends across the country, key metrics include the number of:

• Total certified accounts ever opened
• Accounts currently open
• Accounts opened during reporting year
• Accounts opened by customers new to the institution
• Accounts newly closed

We looked at account opening data in several ways that offer different measures of demand for products certified as meeting Bank On National Account Standards. The running total of accounts opened over time and the number of accounts newly opened during the reporting period offer perspective on growth and momentum, allowing for annual comparisons that show the growth of the marketplace and institutions involved.

Bank On Account Opening at Participating Institutions, 2018-2021

Download: Bank On Account Opening at Participating Institutions (XLS)

The 2021 data reflect an increase of 5,664,799 accounts ever opened, 67% higher than the previous reporting year. Part of the increase is due to an additional 11 participating financial institutions; 17 institutions participated in 2020, compared with 28 in 2021. The over 5.8 million accounts currently open represent the combined total of all participating institutions as of Dec. 31, 2021, 50% higher than the previous reporting year. Again, some of this increase is likely due to the additional financial institutions reporting. There was an increase of nearly 1 million new customers to reporting financial institutions in 2021, rising to 2.7 million from 1.7 million in 2020. Accounts opened by new customers represent 80% of total accounts opened during 2021.The 25% of accounts that closed in 2021 is consistent with the expectations of financial institutions and data findings from the previous year. It does not disaggregate accounts closed by those leaving the financial institution and those closing one account to open another.

Per the 2021 data, the month with the highest number of account openings at large financial institutionsLarge banks have over $100 billion in assets. was March, when 325,161 accounts were opened. The month with the lowest number of account openings was October, when 256,113 accounts were opened. The average number of monthly account openings at large institutions was 284,104.

New Bank On account openings reported by participating community financial institutionsCommunity banks have under $100 billion in assets. were 50% higher relative to 2020, with 12,327 certified accounts opened in 2021 versus 8,203 in 2020. For community financial institutions, November had the most accounts opened in 2021, with 1,365 account openings. February had the lowest number of account openings at community institutions, with 638. Account closure at community institutions was 38% in 2021, much higher than for large banks (25%).

Bank On Account Opening at Community Financial Institutions, 2018-2021

Download: Bank On Account Opening at Community Financial Institutions (XLS)

At large institutions, 80% of customers opening Bank On-certified accounts in 2021 were new to the institution, compared with 58% at community institutions. As data are collected in future years, we hope to take a deeper dive into Bank On-related differences between community institutions and large institutions.

Bank On Account Opening at Large Financial Institutions, 2018-2021

Download: Bank On Account Opening at Large Financial Institutions (XLS)

Account Usage and Consistency

Beyond account openings, it’s crucial to understand how account holders use Bank On-certified accounts for everyday transactions to determine the functionality of the accounts and their ability to meet consumers’ transactional needs. These metrics also help inform the Bank On National Account Standards by providing quantitative data that demonstrate the use and importance of specific account characteristics. The St. Louis Fed assessed overall account activity for debit, deposit and withdrawal transactions, as well as the average monthly balance of the accounts.

The 28 participating financial institutions processed nearly 110 million debit transactions per month, creating an average of over $4.4 billion in debit transaction value per month. Overall, the majority of Bank On account holders (77%) use debit functionality. This suggests that account holders value, use and largely rely on this account feature for regular financial transactions.

Bank On Account Holders’ Debit Transactions at Participating Institutions, 2018-2021

Download: Bank On Account Holders Debit Transactions at Participating Institutions (XLS)

Direct deposit is a telling indicator of consistent usage by account holders, as well as an indication that account holders are engaging different features of the account (e.g., for paycheck deposits, tax programs, and government assistance or public benefits). Almost a third of Bank On account holders use direct deposit, and the percentage has been steadily increasing. Additionally, direct deposit rates tend to be lower among low- to moderate-income (LMI) workers.

Customers also accessed their money using account withdrawal and deposit capabilities, both of which are indicators of safe banking and money management. Among the 28 reporting financial institutions, 75% of all account holders made non-automatic clearing house (ACH) deposits in 2021 with an average value of $283.

The average number of deposits per month in 2021 was 6.5, which remained stable relative to the previous year. Account holders making withdrawals represented 79% of the 2021 data, showing that most account holders were actively using their accounts. On average, the amount per transaction increased from $72 in 2020 to $94 in 2021.

On average, per account monthly balance was $1072 (median of $1024) and monthly balance of all accounts across institutions was $5.4 billion. The monthly balance reported by the participating financial institutions has been increasing since 2018. In 2020, we noted that the increase may have been due to the COVID-19 pandemic related stimulus aid. It is difficult to discern exact reasons for increase this year, but we will continue to monitor this trend in following years.

Bank On Account Holders’ Deposits and Withdrawals at Participating Institutions, 2018-2021

Download: Bank On Account Holders Deposits and Withdrawals at Participating Institutions (XLS)

Online Access

Banking capabilities like online access and bill pay serve as trusted and convenient options for transferring funds between accounts or to other people, all while keeping funds and customers’ accounts safer. Digital activity increased in 2021; 83% of accounts experienced digital activity, compared with 79% in 2020.

In 2021, 37% of account holders used peer-to-peer (P2P) payments, an increase from the previous year’s 31%. Both the average number of P2P transactions per month (almost 12 million) and their average value per month ($189) increased. The number of account holders using bill pay increased slightly to 4%. Participating financial institutions noted that debit transactions and withdrawals were common methods account holders used to pay bills rather than through this feature.

Bank On Account Holders’ Online Usage at Participating Institutions, 2018-2021

Download: Bank On Account Holders Online Usage at Participating Institutions (XLS)

The data in this report continues to show that Bank On-certified accounts attract new customers to the financial mainstream. We would like to thank all our participating financial institutions, and we look forward to welcoming new participants in the future.

In this report, we defined community banks as banks with $10 billion or less in assets and that can be owned by members of the community they serve. They are usually small to medium in size and can be private or public. Large banks have over $100 billion in assets. They are owned by shareholders and are public. The BOND Hub continues to allow all financial institutions with accounts that meet Bank On National Account Standards to submit their data to a federal regulator, ensuring the reporting process is consistent, accurate and secure. Due to limited financial institutions in-between $10 and $100 billion, all banks under $100 billion in assets are placed into the community banks category.

These data are critical to sustaining the momentum of the Bank On movement and, importantly, the availability of safe and affordable banking products. To illustrate the growth of the Bank On market and to support local banking access efforts, the St. Louis Fed has published these data on its website with an interactive tool to display accounts at the ZIP code, MSA and state levels.

Notes

1. This information was updated in June 2023 to reflect that the number of ZIP codes contained in the subsample is 23,780.
2. Large banks have over $100 billion in assets.
3. Community banks have under $100 billion in assets.

The authors worked closely with Amelia Erwitt and Kant Desai of the Cities for Financial Empowerment (CFE) Fund. The views expressed here are those of the authors and do not necessarily reflect the views of the St. Louis Fed or the Federal Reserve System.