In recent months, businesses in the United States have begun grappling with America’s history of racism and inequality.
And banks and other financial services companies, which often have a troubled history when it comes to race, are no exception.
In fact, it can still cost Black people and other people of color more to bank than their white peers—the average minimum balance in Black neighborhoods was $871 to avoid fees, compared to $626 in mostly white neighborhoods. Meanwhile, there is a persistent wealth gap between Black and white Americans. White households in the U.S. reportedly hold seventeen times more wealth than black households do.
What Stash’s Survey Tells Us
A July, 2020 survey of nearly 10,000 Stash customers1 about their relationship to their primary bank outside of Stash showed feelings of mistrust when it comes to their main financial institution: 1 in 5 people said they think they’ve been denied financial products and services due to their gender, race, or income level. Among Black Americans specifically, the percentage jumps to 35%, compared to 17% of white Americans.
Roughly half of Black survey respondents (15 percentage points more than other racial groups) said they think that demographic factors affected how they’re treated by their banks. Over 20% of respondents also said they think that their bank has treated them differently based on income level.
At the same time, respondents suggested that banks can have an important role in helping people of color become more financially whole. When it comes to financial guidance, 15% of respondents said they feel that their banks don’t provide them with sound advice and education and 12% believe that their banks aren’t transparent with them.
More on financial inequality and the wealth gap
And data shows that there is a difference between the way white and Black customers are more generally served by banks. Forty-seven percent of Black households are unbanked or underbanked, meaning that either no one in the household has a checking or savings account or that the household has an account at an insured institution but also has financial products or services outside of the banking system. Just twenty percent of white households are unbanked or underbanked.
At the same time, Black Americans earn less on average than white Americans do. White men in the U.S. earn an average of $2.7 million throughout their careers, compared to Black men, who earn an average of $1.8. This number dips further for Black women, who earn an average of $1.3 million compared to white women who earn $1.5 million.
Banking with Stash2
While banks and other financial services alone won’t be able to solve the problem of the wealth gap or financial inequality, they are a critical part of the solution. With Stash, regardless of your background, you can get a checking account with no account minimums3, no overdraft fees4, and no monthly or annual maintenance3.
Plus, with Stash, you can make sure you’re not falling behind when it comes to investing. On Stash, you can start investing in ETFs and stocks on Stash with any dollar amount. Stash also provides customers with education on personal finance and investing so that you can build a healthy financial home.