By Adam Hartmann, Director, Financial Health Network
Over the past six years, the Financial Solutions Lab has run an annual fintech accelerator that has supported more than 40 companies with investments, resources, mentorship, and more to improve the financial health of people across the U.S. These companies have reached more than 5 million low- to moderate-income consumers – and over 10 million consumers in total – and helped individuals save more than $2 billion to date. Our team has learned a lot from our past cohorts, and we continue to evolve our Accelerator programming. Each cohort seeks to help address a challenge facing low- to moderate-income consumers and is designed for fintechs to achieve impact – even in a dynamic market of existing products and solutions.
This year’s Challenge – our seventh – focuses on building financial resilience and growth by addressing long-standing systemic barriers to financial health, many of which have been exacerbated by the pandemic. We are seeking a broad range of fintech startups targeting low- to moderate-income consumers and underserved communities with solutions focused on insurance, credit-building, short- and long-term savings, financial coaching, and asset-building.
Why Focus on Financial Resilience and Growth?
For many, times have never been more uncertain. We know that the economic crisis caused by the coronavirus pandemic has deepened the already precarious financial health challenges faced by millions of underserved people across the U.S. There is a need for innovative technologies and solutions to improve financial resilience and establish long-term stability.
- Two-thirds of adults in the U.S. are not Financially Healthy, according to the newly released U.S. Financial Health Pulse: 2020 Trends Report, with Black Americans, people with low incomes, and women bearing the brunt of the economic burden of the pandemic.
- 2020 Pulse data reflected the flat or declining financial health of Black and low-income people compared with the previous year.
- Months into the pandemic’s economic fallout, underserved communities continue to be disproportionately affected, with a majority of Black and Latinx households across major U.S. cities reporting serious financial hardship.
- According to the JPMorgan Chase Institute, Black and Latinx families have 32 and 47 cents in liquid assets, respectively, for every $1 held by White families.
We know that financially vulnerable individuals are in need of fundamental financial access and protections to help improve their financial health in both the short and the long run. Stronger financial resilience can positively impact other areas of an individual’s life. Having assets and a safety net provides individuals with the means necessary to help mitigate income and expense volatility, and support access to healthcare, food security, education opportunities, employment, housing, and other areas that intersect with financial health. Research from the Aspen Institute found that families with a savings cushion as little as $250 to $750 are less likely to be evicted, miss a housing or utility payment, or receive public benefits after a job loss, health issue, or large income drop.
How Fintechs Can Help
Fintechs are uniquely positioned to address these financial health challenges, given their nimbleness in building, testing, learning, and iterating on solutions that address consumer needs. That’s why the 2021 Accelerator Challenge is seeking a broad range of fintech solutions to support individuals. The Challenge is seeking applications from startups that offer tools and resources for:
- Short-term savings
- Retirement and long-term savings
- Financial decision-making
- Financial coaching
Each selected organization will receive a $125,000 investment; product development support to address user needs; guidance to navigate the legal and regulatory fintech environment; insights on impact and customer financial health measurement; resources for external marketing and communications; mentorship from financial services and financial health experts, including executives from JPMorgan Chase and Prudential Financial; support to further diversity, equity, and inclusion within their organizations; and additional resources to advance their work improving the financial health of people across the U.S.
Learn More, Spread the Word, and Apply
If you are, or know of, a fintech company that can tackle these financial health issues and help people across the U.S. build resilience, we invite you to learn more about this year’s Challenge. The program is accepting applications through January 12, 2021, and will select the next cohort in the spring of 2021. We can’t wait to meet our new cohort and get to work to explore fintech solutions that can help consumers build resilience and improve their financial health.
The Accelerator’s seventh challenge will further the mission of the Financial Solutions Lab to cultivate, support, and scale innovative ideas that advance the financial health of low- to moderate-income individuals and historically underserved communities. For a list of companies selected for previous Accelerator cohorts, view our portfolio of companies.