The Financial Solutions Lab is a five-year program managed by the Center for Financial Services Innovation with a $30-million grant from JP Morgan Chase. Its goal is to identify, test and bring to scale-promising innovations to help Americans increase savings, improve credit and build assets.
“What we tried to do this year is look at longer-term shocks that can really set a family behind,” Financial Solutions Lab director Ryan Falvey said.
Mr. Falvey said a majority of Americans walk a thin financial line. Four out of five experience a significant financial shock every year and half would have to borrow to pay a $600 expense within a week.
Interest in the Financial Solutions Lab is growing, Mr. Falvey said. The number of 2016 applicants exceeded 2015’s by 20 percent and the vast majority were new applicants.
“We’re doing a good job of getting the word out,” Mr. Falvey said. He also acknowledged Financial Solutions Lab only sees a small sliver of the market, meaning there are thousands of companies trying to build a better financial future for Americans.
“Within that group we see greater evidence of the entrepreneurial pool and investment,” Mr. Falvey said.
Many of those companies are working on savings products, Mr. Falvey added and more than a few target specific demographics like Hispanic people, African American women, immigrants, students, and older Americans.
“As market develop you do see more differentiation,” Mr. Falvey said. More high quality entrepreneurs are bringing a wealth of knowledge and new perspectives to solving problems they often have personal experience with.
Mr. Falvey shared a few examples of interesting companies who applied to the the program in 2016. Bee is a checking account alternative targeting urban consumers who are not well-served by traditional brick and mortar institutions. They sign up customers at kiosks and pop-up locations in busy public spaces. Once customers open an account they can take a picture of a check and have quick access to their funds.
“People sign up friends and family, bringing more people into a better financial relationship,” Mr. Falvey said.
eCreditHero helps people repair their credit by looking for errors on their credit reports, which is a common occurrence, Mr. Falvey said. Launched on the Steve Harvey Show, eCreditHero finds success reaching their target groups through Facebook and by offering small prizes.
“The credit repair element creates a valuable connection to consumers and increases the chances of a long-term relationship with them,” Mr. Falvey said.
Everlance is a solution targeting 1099 freelancers that helps them track mileage and expenses. Mileage on the app is displayed as tax savings.
Remedy saves the average family $1,000 each year on their medical bills by combatting billing errors that have proliferated after the debut of the Affordable Care Act. The user gives Remedy their insurance credentials and Remedy disputes questionable bills, taking a cut out of the savings.
The one common denominator Financial Solutions Lab entrepreneurs share is their motivation for starting their companies, Mr. Falvey said.
“They are all driven by an awareness there is something fundamentally wrong with the financial services industry.”
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