This article was submitted by CTC Foundation community partner JPMorgan Chase & Co. The application deadline for the third annual program is April 27th.
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).
· 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.
· 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.
· 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.
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.