Consorteum Holdings Inc. is considered a non-traditional CFSC (Consumer Financial Services Company). A CFSC is any financial service provider delivering fee-based services, such as check cashing, money transmission, deferred deposit, and bill payment. Traditionally, most such companies are lender based. But many consumers are now looking for convenience-based services beyond the offerings of the lender-based CFSC. This has given rise to one of today’s fastest growing industries, the non-traditional CFSC, targeting consumers who need additional services and convenience.
These consumers seek things such as easy access to money through multiple access points. The result has been products such as PayPal, Coinstar, or H&R Block Refund Anticipation Loans. The suburban market has seen the greatest growth, demanding faster delivery of financial services and more flexible hours. Attempting to meet these needs, there has been a dramatic 300% increase in the number of CFSCs in North America since 1995.
But fully two-thirds of CFSC customers still seek more convenient financial services, and are considered “underbanked”. Many other customers are, for various reasons, essentially “unbanked”. They are looking for basic financial services, and have been largely ignored by mainstream financial institutions.
Consorteum’s strategy is to capitalize on this growing market by circumventing the source of the current CFSC market hold, the paycheck. Non-traditional CFSCs, such as Consorteum, serve the increasing number of consumers whose needs are not being met by traditional banks, by offering payroll services through convenient, multi-channel service points.
Studies indicate that consumers prefer to obtain a diversified bundle of financial services through a single provider. Services experiencing the most growth include check cashing, money transmission, and deferred deposits (where the customer can obtain funds prior to actually depositing a check). Check cashing is expected to grow by over 11% per year. Domestic money transmissions are expected to grow by 15% per year, while international money transmissions are expected to grow by 20%.
One of the fastest growing industry products serves the increasing demand for deferred deposit, a form of advance on an anticipated future deposit. This is where the customer can, for a fee, obtain funds from an upcoming check prior to the check actually being deposited. The delay in deposit could be, for example, up to thirty days, and could possibly be extended for an additional fee.
Although these are the fastest growing products now, Consorteum intends to diversify its offerings to include new products that will provide similar or better growth in the future.
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