Virtual fintech lab launched by CFSI and
JPMorgan Chase helps fintech startups improve and scale solutions
for people of color, low-income women, aging populations and people
with disabilities
Today the Financial Solutions Lab
(FinLab) at the Center for Financial Services Innovation (CFSI)
with founding FinLab partner JPMorgan Chase & Co. officially
launched its third annual $3 million challenge to identify
tech-enabled innovations that improve the financial health of
Americans. The $30 million, five-year virtual lab initiative
unveiled Financial Health as the broad theme for its third-year
challenge, with a special interest in solutions geared toward the
unique needs of often overlooked segments, including people of
color, the aging, people with disabilities and low-income
women.
FinLab provides each winning organization with $250,000 in
capital, support from FinLab operating partners IDEO.ORG and
ideas42, strategic guidance from its industry-leading advisory
council, and resources from founding partners CFSI and JPMorgan
Chase, including the JPMorgan Chase employee mentorship program.
The importance of this new challenge topic was determined using
CFSI’s Consumer Financial Health Survey, JPMorgan Chase Institute
research as well as research from other thought leaders.
“The consumer impact of FinLab companies to date has been really
astounding,” said Ryan Falvey, Managing Director at CFSI.
“The 18 organizations supported by the lab so far have cumulatively
grown to help more than one million Americans improve their
financial health — 10 times the consumer base they served before
joining the lab. First year Lab winner Digit, for example, has
helped clients save more than $350 million. And EARN, part of the
lab’s second class, found that 83 percent of its clients develop a
habit of savings, with low-income households saving an average of
$558 over six months. We expect this level of impact to continue
with the next class of FinLab innovators.”
“Technology can help us reach overlooked populations with more
affordable and convenient financial products and services that can
promote financial health,” said Colleen Briggs, Executive Director,
Community Innovation, JPMorgan Chase. “But to unlock this
potential, we want to see more innovators who understand these
communities and are designing solutions that meet their needs and
preferences.”
Research shows that certain segments of the population are
disproportionately struggling with their financial health.
- People of Color: Over two-thirds
of African-American and nearly three-fourths Latino households lack
the savings to recover from a traumatic financial event (job loss
or medical emergency).i
- Aging Americans: Older families
experienced higher expense volatility while often managing against
fixed incomes. Forty-four percent of families 65 and older made an
extraordinary auto-, medical-, or tax-related payment.ii
- People with Disabilities:
Households with disabilities were much less likely to save for
unexpected expenses. Thirty-nine percent of household with
disabilities compared with 61 percent of households with no
disabilities saved for unexpected expenses or emergencies in the
past 12 months.iii
- Low-income Women: For every $1
that men own, women own, on average, 32 cents. That gap is
even greater broken down by race, with African-American and Latina
women owning less than one cent for every $1 owned by a white man.
Regardless of race, many mothers face the "motherhood penalty" in
the workplace. Low-wage working mothers see their wages decrease 7%
for each child they have.iv v
Applying for the Challenge
FinTech innovators interested in joining FinLab’s third year
class can now complete and submit an application at
http://finlab.cfsinnovation.com. There are two “rounds” for this
year’s challenge, with deadlines set for March 16 and April 27,
2017. Winners will be announced on stage at the EMERGE Forum 2017,
held June 15-17 in Austin, Texas.
FinLab Success
Also today, FinLab celebrated the culmination of its second
cohort of nine fintech innovators. FinLab’s first and second
challenges, focused on solving consumer cash flow issues and
financial shocks, respectively, drew more than 600 total
applications from companies and nonprofit organizations serving
more than 10,000,000 Americans combined.
To date, the Financial Solutions Lab has supported 18 financial
technology companies offering innovative financial products to help
more than one million Americans improve their financial health, a
10x growth since joining the lab. Collectively, FinLab companies
have raised over $100,000,000 in capital since joining the
program.
The two FinLab classes to date include Albert, bee, EARN,
EarnUp, eCreditHero, Everlance, Remedy, Scratch, and WiseBanyan
from the just-completed Year Two, and Ascend Consumer Finance,
Digit, Even, LendStreet, PayGoal by Neighborhood Trust, Prism,
Propel, Puddle and SupportPay from Year One.
“Creating new products is difficult, particularly in a space
dominated by a few large players,” said Sameh Elamawy,
co-founder of Scratch. “Having CFSI's knowledge and connections at
our fingertips, as well as the resources of our mentors at JPMorgan
Chase, has made a tremendous difference in our product design.”
Leigh Phillips, CEO of nonprofit Lab member EARN, echoes those
sentiments. "Our experience with the Lab has far exceeded any
expectations we may have had," said Phillips. "In just a few short
months, we've expanded our user base more than ten-fold across all
fifty states and we can directly attribute those new savers to
connections that the FinLab helped us make."
STATEMENTS OF SUPPORT
“Working-age people with disabilities are more than twice as
likely to be living in poverty as those without disabilities (28.5%
compared with 11%),”said Tom Foley, Deputy Director,
World Institute on Disability. “Shining a light on the
unique challenges that this population faces, in an effort to
identify financial tools to support their financial health and
stability, is critically important. World Institute on Disability
applauds the Financial Solutions Lab and looks forward to being a
part of this important work.”
"It's no small feat to help more than one million Americans
improve their financial health," said Andrea Levere, President
of CFED. "As a member of the FinLab's Advisory Council, I've
been greatly impressed with the quality and innovation of
the companies supported by this program. I'm excited to
see real financial solutions directed to helping
consumers who are often overlooked."
“We all need safe ways to help build, manage, and protect
savings over our lifetimes. With increasing longevity and a growing
aging population, it has never been more urgent to solve these
challenges,” said AARP Chief Public Policy Officer Debra
Whitman, Ph.D. “AARP applauds the Center for Financial Services
Innovation’s Financial Solutions Lab for launching their
competition to develop innovative approaches to help families build
and maintain their financial resilience as they age.”
“Now more than ever, older Americans are facing increasing
levels of debt and financial insecurity,” said Laura Carstensen,
Director of the Stanford Center on Longevity. “Innovation is
critical to tackling this issue and we are encouraged to see the
Center for Financial Services Innovation’s Financial Solutions Lab
challenging the fintech industry to play an important role.”
About the Financial Solutions Lab
The Financial Solutions Lab is a $30 million, five-year
initiative managed by the Center for Financial Services Innovation
(CFSI) with founding Lab partner JPMorgan Chase & Co. to
identify, test and expand the availability of promising innovations
that help Americans increase savings, improve credit, and build
assets. The lab will launch a series of competitions to identify
solutions to specific consumer financial challenges. It will
provide incentives for entrepreneurs, businesses, and nonprofits to
enhance financial products and services that address these
challenges and improve consumers’ financial health. For more
information, visit http://finlab.cfsinnovation.com.
About the Center for Financial Services Innovation
(CFSI)
CFSI is the nation’s authority on consumer financial health.
CFSI leads a network of financial services innovators committed to
building a more robust financial services marketplace with higher
quality products and services. Through its Compass Principles and a
lineup of proprietary research, insights and events, CFSI informs,
advises, and connects members of its network to seed the innovation
that will transform the financial services landscape. For more on
CFSI, go to www.cfsinnovation.com and follow on Twitter at
@CFSInnovation.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global
financial services firm with assets of $2.5 trillion and operations
worldwide. The Firm is a leader in investment banking, financial
services for consumers and small businesses, commercial banking,
financial transaction processing, and asset management. A component
of the Dow Jones Industrial Average, JPMorgan Chase & Co.
serves millions of consumers in the United States and many of the
world’s most prominent corporate, institutional and government
clients under its JPMorgan and Chase brands. Information about
JPMorgan Chase & Co. is available at www.jpmorganchase.com.
i
http://www.globalpolicysolutions.org/wp-content/uploads/2014/04/Beyond_Broke_FINAL.pdf
ii JPMorgan Chase Institute, Coping with Costs: Big Data on
Expense Volatility and Medical Payments. In its Coping with Costs
report, JPMorgan Chase Institute defines “extraordinary payments”
as large in magnitude: At least $400 in magnitude and more
than 1 percent of annual income; and unusual: More than
2 standard deviations away from the individual’s normal monthly
mean expense in this category.
iii (NDI, Banking Status and Financial Behaviors of Adults with
Disabilities: Findings from the 2015 FDIC National Survey of
Unbanked and Underbanked Households, forthcoming)
iv Asset Funders Network
v Center for Global Policy Solutions
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version on businesswire.com: http://www.businesswire.com/news/home/20170222005571/en/
CFSIShannon Austin,
703-338-8813Saustin@cfsinnovation.comorJPMorgan ChaseNicole
Kennedy, 609-458-1128Nicole.kennedy@chase.com
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