Banked
- An individual who has access to financial products offered through a banking service or institution. (ie. open a savings account, personal checks, credit cards/loans, etc…)
Underbanked
- An individual who uses fewer banking services, relying on cash more than checks, credit or other financial products. Often uses short-term payday loans and check cashing services.
Unbanked
- An individual who has no access to any traditional financial services. Either by choice or simply does not have any option available.

Who are the Unbanked?
As of 2017, the World Bank estimated that 1.7 billion people were unbanked worldwide. They have no access to a bank account, with over half coming from impoverished or developing countries and communities. Unbanked represent 22.4% of the world and included in that: 56% are women, nearly half live in 7 underdeveloped countries and majority are undereducated (close to 2/3 have primary education or less). May it be by choice or not, being unbanked can be a large hurdle for normal life. With no traditional financial products available, they do not have the ability to save, take loans or invest. Unbanked also typically do not have pensions, insurance or any other type of professional money-related services.


Some people prefer to be without a bank account and only use cash (fiat currencies), prepaid debits cards, money orders (some grocery stores and post offices have these available) or cryptocurrencies. People who choose to be unbanked do not trust the current financial systems, either because it has failed them in the past or because they are trying to avoid their activities from being tracked. Aside from criminals, most who choose to be unbanked do so because they have been through a hardship such as a financial depression, banking crisis, hyperinflation or currency devaluation. Their trust has been shaken with the current systems so they have chosen to remain “off-grid” and operate in transactions they feel most comfortable with.
The majority of unbanked however have no access, are not aware or simply cannot afford the options accessible. With brick and mortar locations sparsely available in developing areas, many individuals cannot get to these locations due to transportation or time restraints (banking hours). Even if they can open an account, extremely poor individuals may have zero need for a bank account as the fees would be more than they can afford (Nearly 2/3 of unbanked reported that this is the most common barrier).
Up until now, owning a bank account gave you the freedom to open a savings account for emergencies, take a loan to purchase a home, invest for the future, as well as many other financial services offered to most. With advances in technology, the financial playing field is becoming a little more even, especially with the introduction of DeFi(Decentralized Finance).
What can be done to help the Unbanked?
World Bank records show that from 2014 to 2017 approximately 551 million people worldwide were able to open some sort of a financial service account with access through mobile money providers, as well as traditional efforts.
With the introduction of DeFi (Decentralized Finance) and Dapps (Decentralized Applications), anyone who has a mobile phone and internet connection can now use financial products that the majority of the world already has. An estimated 2/3 of unbanked already have access to a mobile phone, which means that potentially 1.133 billion people could make use of DeFi products right away. Awareness of these products and their use is all that needs to happen. (So please feel free to share your newly learned knowledge and help others along the way!)
Some may still avoid DeFi as there are methods to track transactions and holdings but overall this will be a huge step towards world wide financial freedom. On the other hand, many may choose to become unbanked in the near future due to less restrictions with DeFi over traditional finance systems.
