FinLab Unveils $3 Million Year-Two Challenge to Tackle Financial Shocks

Financial Solutions Lab
FinLab Unveils $3 Million Year-Two Challenge to Tackle Financial Shocks

FinLab officially unveiled Financial Shocks as the theme for our second-year challenge. We made the announcement at a private event held on February 12 in San Francisco, which gathered our year-one FinLab innovators, executives and advisory council members to discuss the progress we’ve all made during our first year and talk about the impacts their solutions are bringing to American consumers. Starting today, we’re on the hunt for FinTech innovators who are creating solutions to help Americans prepare for — and weather — financial shocks.

Why financial shocks?
Our choice wasn’t random. We chose this new challenge topic using CFSI’s Consumer Financial Health Survey and research from top industry thought leaders. For example, there’s a terrific study from Pew Charitable Trusts that revealed 60% of Americans experienced a financial shock in the past year, and only 6 in 10 households had enough liquid savings to cover a $2,000 unexpected expense. And a study by the JPMorgan Chase Institute estimated that a typical middle-income household needed approximately $4,800 in liquid assets to sustain monthly fluctuations in income and spending, but had only $3,000 available. These numbers show us that when it comes to making their way through sudden expenses like car repairs, replacing a household appliance, loss of work due to illness or other shocks, Americans simply do not have enough ready savings to weather such events. These financial shocks are causing consumers to draw from their long-term and retirement savings, sell assets or default on their existing debts.

Our first class
The nine members of our inaugural group from our first Challenge — which was seeking solutions to help Americans better manage cash flow — have spent the last several months improving their products and scaling their businesses to help more Americans improve their financial health. FinLab provided each member with $250,000 in capital, support from FinLab operating partners and ideas42, strategic guidance from its industry-leading advisory council, and resources from founding partners CFSI and JPMorgan Chase. FinLab’s year-one members include Ascend Consumer Finance, Digit, Even, LendStreet, PayGoal by Neighborhood Trust, Prism, Propel, Puddle and SupportPay.

What people are saying about our first year
“The lab was instrumental in helping us grow our business and providing the expert insights we needed to expand our solution to more underserved consumers,” said Jimmy Chen, Founder and CEO of Propel. “In fact, the newest iteration of our product was inspired by collaboration we developed through FinLab, and this re-thinking has made our product attractive for Silicon Valley-style investors as a result.”

“FinLab and CFSI have given us an unparalleled opportunity to work with executives from the largest banks in the country, along with government and regulatory bodies,” said Ethan Bloch, CEO of Digit.

“This access has been phenomenal as it has allowed Digit to be involved in conversations directly impacting the future of FinTech.”

FinLab year-one members Ethan Bloch, CEO of Digit (Left), and Jimmy Chen, Founder and CEO of Propel (Right)

FinLab year-one members Ethan Bloch, CEO of Digit (Left), and Jimmy Chen, Founder and CEO of Propel (Right)

“The opportunity for technology to create meaningful change in consumers’ financial lives has never been greater,” said Susan Ehrlich, Board Chair of CFSI and FinLab Advisory Council member. “FinLab’s first-year challenge harnessed innovation to improve cash flow management for millions of Americans. I am excited to see the lab build on this success. By powering creative ideas with the right people and resources to make them happen, FinLab is a catalyst for producing a more financially healthy America.”

“JPMorgan Chase is proud to play a role in the first-year success of the Financial Solutions Lab and of the groundbreaking contributions made by the FinLab’s first class of entrepreneurs,” said Noah Wintroub, Vice Chairman, JPMorgan. “Through technology and innovation, they’re tackling some of the biggest financial issues facing people today. The work of this and future FinLab classes will change the way Americans are managing their finances — allowing them to stabilize their finances, build resiliency and meet their long-term goals.”

Noah Wintroub, Vice Chairman, J.P. Morgan (Left) and Susan Ehrlich, Board Chair of CFSI and FinLab Advisory Council member (Right) at a FinLab event New York City in May 2015

Answer the call
If you’re a FinTech innovator interested in joining our sophomore year, you can complete and submit an application here before April 7, 2016.

Each application is closely reviewed by a cross-sector group of experts including strategic partners in human-centered design, behavioral economics, community outreach, and for-profit entrepreneurship. Finalists will be invited to pitch their solution to a panel of judges at the EMERGE Forum 2016, held June 15–17 in New Orleans, La.

What next?
Webinar: Join our online conversation on Friday, February 26 in a webinar on Helping Americans Weather Financial Shocks. Register today >>

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