JPMorgan Chase and the Center for Financial Services Innovation (CFSI) announced last week the launch of the Financial Solutions Lab, a $30 million, five-year initiative aimed at improving Americans’ financial capability.
The lab will host a series of competitions for entrepreneurs over coming years to identify solutions to help consumers improve their financial health through increasing savings, improving credit and asset-building.
“CFSI has spent the last decade understanding the financial needs and behaviors of consumers and has a strong track record of seeding promising innovations that help to address them,” CFSI CEO Jennifer Tescher said. “Now that financial capability has become the norm, this Lab is the opportunity to scale powerful ideas that will impact millions of Americans.”
According to JPMorgan, 25 percent of American households rely on alternative nonbank financial services that can often be costly and negatively impact financial health, and a new white paper done in partnership with the University of North Carolina-Chapel Hill showed financial insecurity can have consequences for the larger economy.
The Financial Solutions Lab seeks to address the challenges facing the unbanked and underserved through the guidance of technology experts, nonprofit groups and consumer advocacy organizations. Ideas42 and IDEO.org will serve as strategic advisors to the initiative.
“So far, efforts to address financial insecurity have largely focused on increasing awareness and knowledge,” Josh Wright, the executive director of ideas42, said. “But research has shown the need to identify strategies that help consumers overcome these barriers to promote better financial behavior. By leveraging behavioral insights, we hope to create scalable, sustainable products and services to promote financial security.”