The Financial Solutions Lab (FinLab) is a 5-year, $30 million initiative managed by the Center for Financial Services Innovation (CFSI) with founding partner JPMorgan Chase & Co. to identify, test and expand the availability of promising innovations that help Americans increase savings, improve credit, and build assets.

Now in its second year, FinLab launches a series of competitions to identify solutions to specific consumer financial challenges. Through each challenge, FinLab provides incentives for entrepreneurs, businesses, and nonprofits to enhance financial products and services that address specific consumer pain points and improve financial health.

Currently, FinLab is accepting applications for its 2016 Innovation Challenge: Weathering Financial Shocks. CDFI Connect spoke with Maria Lajewski, Manager at CFSI to learn more about FinLab and where CDFIs might play a role.

Can you give a little background about how FinLab came about?

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. Now that financial capability has become the norm, the Financial Solutions Lab is an opportunity to scale powerful ideas that will impact millions of Americans.

In May 2014, JPMorgan Chase and CFSI announced their collaboration on the Financial Solutions Lab. This cross-industry initiative is designed to catalyze the development of innovative, technology-enabled strategies, products, and services that align with consumers’ financial needs.

FinLab announces a challenge topic each year and selects a class of innovators—both for-profit and nonprofit—who participate in an 8-month virtual program.

What inspired the Financial Shocks challenge?

Each year, we conduct a thorough process to identify a specific consumer challenge to ground the Lab’s focus. We look closely at CFSI’s research findings and the research of other leading organizations in the field, such as the CFED and Pew Charitable Trusts. We also survey both internal and external stakeholders for ideas and suggestions. After closely considering more than 40 consumer challenges and the market opportunity for each, we decided to focus this year’s challenge around long term financial health and resiliency. When it came down to it, resiliency or weathering financial shocks was a nice complement to the Lab’s first year challenge, which focused on helping consumers manage their day-to-day finances. This second challenge takes a longer-term view, so we hope to see more products focused around insurance, savings, and access to responsible credit in the next applicant pool.

What types of innovators are best suited for FinLab?

We look for innovators—both for-profit and nonprofit—who share CFSI’s mission to improve financial health, are building high-quality products related to the Lab’s challenge topic, have a product in market (with at least 1 customer), and who have a clear vision for how their organization can benefit from the Lab’s resources. We focus on early stage organizations because they can quickly serve as a model for aspiring entrepreneurs, and can demonstrate to the investor community and market at-large that high impact and high-growth can be complementary.

Winners receive $250,000 in addition to a host of non-financial resources, including access to CFSI’s Financial Health Network, office hours and 1:1 engagements with our top-tier resource partners, and networking opportunities. In addition, we bring the innovators together every 4-6 weeks over the course of the 8-month program for in-person meetings. The meetings take place around the country and range from peer networking in Jackson Hole, WY to meetings with senior policymakers and regulators in D.C.

What can CDFIs learn from FinLab’s first class?

User acquisition is often a challenge for early stage startups—especially reaching underserved populations. Building trust take a long time, so being able to work with a trusted community partner can accelerate growth and help startups gain traction with consumers who are struggling the most. CDFIs can be an ideal distribution partner given their longstanding history of serving distressed communities and the residents and small business owners that live there.

Aside from actually submitting an application themselves, how can CDFIs be involved with FinLab?

We would love to work with CDFIs who are interested in distributing the products in FinLab with the populations they serve. Each year we select a balanced portfolio of products, so there is a range of products and services that may be of interest to the residents and small business owners that CDFIs reach. In turn, CDFIs can be confident that the products available through FinLab have been thoroughly vetted and offer a high-quality solution. In addition, offering innovative products and services would demonstrate a CDFI's commitment to improving the financial health of the population it serves and enhance or deepen engagement efforts.

Applications for the second challenge, Weathering Financial Shocks, are due April 7th (11:59 pm pacific time). Winners will be announced at CFSI’s Emerge Conference, June 15-17 in New Orleans.

Learn more and apply here.

 

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