For the second year of their Financial Solutions Lab competition, the Center for Financial Services Innovation and JPMorgan Chase are looking for companies that would help people prepare for and weather financial shocks.
The lab is offering a total of $3 million to the winning contestants, who will have two years to develop their solutions, and is accepting applications to the lab through April 7.
The lab chose financial shocks as this year's theme in response to research that found Americans are woefully underprepared for unexpected expenses. A recent study by the Pew Charitable Trusts found that only 60% of households had enough money saved to cover a $2,000 unexpected expense.
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A number of companies across the U.S. are harnessing technology to solve Americans' cash flow challenges. But there is much more to be done to bring these solutions to the millions of Americans who need them.
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A handful of entrepreneurs have created apps that let workers, especially those with inconsistent incomes, receive portions of their paychecks before payday. Their emergence underscores how slower payments look out of date in an on-demand world.
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Finalists in the contest will be invited to pitch their solutions to a panel of judges at the EMERGE Forum 2016 in June in New Orleans. American Banker is a co-sponsor of that conference.
The venture between CFSI and JPMorgan is a five-year initiative with $30 million being offered to innovators. Last year's contest focused on solving consumer cash flow issues. It drew nearly 300 applications from companies and nonprofit organizations. The nine winners were Ascend Consumer Finance, Digit, Even, LendStreet, PayGoal by Neighborhood Trust, Prism, Propel, Puddle and SupportPay. Each received $250,000 along with support from the lab's operating partners IDEO.ORG and ideas42, strategic guidance from an advisory council and various resources from CFSI and JPMorgan.
"The opportunity for technology to create meaningful change in consumers' financial lives has never been greater," said Susan Ehrlich, board chair of CFSI and member of lab's advisory council. "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."
