Though the COVID-19 pandemic has accelerated consumers’ reliance on digital channels for their banking needs, low levels of comfort and trust remain a barrier to adoption in many low- to moderate-income and vulnerable communities. To better understand the digital divide and its impact on financial health equity, we invited 2020 Exchange grantee Change Machine and its partner organization, the National Association for Latino Community Asset Builders (NALCAB), to share insights and lessons from their community-driven work.
In our discussion, Change Machine and NALCAB shared some of their key takeaways for nonprofit practitioners and fintech providers who are committed to reducing the digital divide by providing safe, affordable, and high-quality tech-enabled products and services to these communities.
Key Takeaways for Nonprofit Practitioners
- Start with your population’s highest need. While the number of fintech offerings can be overwhelming at first, start by focusing on the specific needs of your target audience. This process will help narrow the overall set of possible fintech solutions. For example, one of NALCAB’s members sought to integrate a budgeting tool, while another was more interested in a tax preparation solution.
- Meet your participants where they are. Introduce participants to a range of fintech tools to encourage, but not force, exploration. This approach helps participants learn about and try the tools at their own pace and level of comfort. NALCAB also found the one-on-one setting of financial coaching sessions to be particularly helpful in introducing new tech-enabled solutions to a community.
- Help your staff increase their own fintech capabilities. NALCAB was particularly excited to partner with Change Machine because of its capacity-building tools that help nonprofit practitioners evaluate a range of fintech products for their clients’ needs. In addition to its recommendation engine, Change Machine also provides training and technical assistance for practitioners who are ready to integrate a product into their service delivery. Each of the four members who participated in NALCAB’s pilot program received access to Change Machine’s recommendation engine and technical support.
- Continue collecting data post-pilot program. Six months after the pilot program, Change Machine and NALCAB followed up with participants to find out how many of them were continuing to actively use one of the tools and to capture their experiences. Continuing to collect participants’ data post-pilot program can provide you with additional data to gauge the tool’s fit, relevance, and impact for participants.
Key Takeaways for Fintech Providers
- Recruit and hire diverse candidates. We believe the best financial products and services are those that are built by teams who reflect the diversity of their customers. Change Machine believes the same, which is why they note that “75% of our partners are Black, Brown, or Woman-led.” The participants in NALCAB’s pilot also emphasized their comfort in knowing the teams behind the products they were considering reflected the diversity of their clients and communities.
- Focus on long-term financial goals. Change Machine and NALCAB agree that the most valuable fintech products they’ve encountered are those that support consumers on their financial health journey over the long run. The communities of color that Change Machine and NALCAB serve expressed particular interest in solutions that support generational wealth-building and other long-term financial goals.
- Engage at the community level. While many startups have entire teams dedicated to user research and design, these organizations would be wise to invest their time and resources to build deeper relationships with community-based organizations and other practitioners who work directly with Financially Vulnerable populations.
To reach these recommendations, Change Machine and NALCAB drew on their long track records of financial services expertise and grassroots community engagement to share insights from two pilot programs in particular:
- One pilot program aimed to address the financial health challenges of workers and students. Change Machine vetted and tested a suite of five products from Black-founded organizations relevant to the financial health needs of students, faculty, and administrators of several Historically Black Colleges and Universities (HBCU).
- Another pilot program aimed to address the financial health challenges of NALCAB’s community-based members. NALCAB partnered with Change Machine to evaluate a short list of relevant fintech products that its members could select and integrate into their financial capability service delivery.
Steps You Can Take
Whether you are a nonprofit practitioner or fintech provider, we hope some of these takeaways help you consider your organization’s role in reducing the digital divide that’s impacting communities of color. To learn more about Change Machine and NALCAB’s work together, check out their recent report.
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