As of 2021, around 6 million Americans were unbanked and this problem disproportionately affects Black and Hispanic households, of which 10% have no checking or savings account.
Government-to-Person (G2P) payments may be a way to bring unbanked communities into the fold in a way that counters lack of trust and incentivizes participation.
An integral part of a bank's KYC and AML work is focused on ensuring that Politically Exposed Persons (PEPs) cannot abuse the bank’s services for their own gain. Things slip through, though.
But oversight overeagerness on the part of FIs can create issues for those associated to PEPs as well as prevent the FI from focusing on genuine detection.
