Friday, June 15, 2012

7:30 AM - 8:30 AM
Fraud and the Underbanked: Trends, Statistics and Mitigation Strategies – VOTERS CHOICE for Build Trust
Kamila Kibilda, SVP and General Manager, FIS

Fraud is a constant factor that affects both the underbanked consumer as well as the financial services provider. This roundtable will explore a statistical year over year review of 2011, and highlight fraud drivers for the underbanked check cashing portfolio. This topic relates closely to the Build Trust principle as inconsistent fraud management strategies and the resulting approval/decline decisions affect the underbanked consumer and their access to financial services. More intelligent fraud management strategies lead to more consistent decisions, resulting in a satisfied consumer who can trust that they will have access to their financial service whenever they need it.

7:30 AM - 8:30 AM
Meeting Small-Dollar Credit Needs: Serving Low-Income Savers – VOTERS CHOICE for Create Opportunity
Greg Mills, URBAN INSTITUTE

Designing sustainable small-dollar credit products requires identifying low-risk borrowers efficiently, with minimal underwriting. One untapped market for such products? Low-income consumers that participate in matched savings programs, including individual development account (IDA) programs and tax-time savings initiatives. These account holders have demonstrated their ability to budget and save; they are acquiring a capacity to repay small-dollar loans. Unable to borrow affordably because of thin credit histories, they need credit access to meet emergency expenses, protect their savings, and qualify for match funds.

7:30 AM - 8:30 AM
The Use of Alternative Data in Credit Risk Decisions for the Underbanked – VOTERS CHOICE for Embrace Inclusion
Jeffrey Feinstein, PhD, Sr. Director of Analytic Strategy, LEXISNEXIS

Alternative Data emerged in the late 1990s as a means to open up access to credit to underserved consumers. Today, alternative data is used in millions of credit decisions; however its use is not well understood outside the lending industry. We will review the various types of data used in credit risk assessments including traditional credit reports and modern alternative data sources. We will discuss how alternative data relates to the compass principles of “embrace inclusion” and “create opportunity.” We will ask attendees for their opinions on the types of data currently being used in the industry, and their ideas for other data that could/should be used to help underbanked consumers gain access to credit.

7:30 AM - 8:30 AM
Designing Attractive Savings Products for Lower-Income Consumers (Compass Principle: Promote Success)

Basic savings products have a fundamental role in creating an inclusive financial system. While the hope is that savings accounts can be used to secure a nest egg of precautionary savings to safeguard a family when emergency expenses or decreases in income arise, several in-market launches of basic savings products targeted to lower-income consumers (often called small dollar savings products) yield disappointing enrollment rates and chronically low balances. Before concluding that there is no demand for savings products among lower-income consumers, program managers need to ask: Is there a better way to design more attractive and useful savings products for this target market? Based on an in-depth review of household surveys, academic research, industry reports and pilot program evaluations on financial services and savings, this session will evaluate the market potential and consumer preferences for small dollar savings products among lower-income consumers and discuss how program managers can select different product features, pricing structures, distribution channels and promotional activities to tailor an offering that is beneficial for consumers and the provider.

7:30 AM - 8:30 AM
Building Behavioral Economics Into Financial Product Design – VOTERS CHOICE for Promote Success
Rebecca Rouse, INNOVATIONS FOR POVERTY ACTION

Financial products can better meet the needs of consumers by integrating product features informed by behavioral economics. Products leveraging tools such as reminders, commitments, automation and habit formation can help consumers be more successful at achieving their financial goals and provide cheap and simple alternatives to high-touch financial education programming. This panel will discuss opportunities to incorporate tools from behavioral economics into mainstream financial products and feature lessons learned so far from Innovations for Poverty Action’s Financial Products Innovation Fund. One or more of the Fund’s practitioner partners will also participate in the roundtable.

7:30 AM - 8:30 AM
Rapid Prototyping for the Underbanked (Compass Principle: Promote Success)
Ben Knelman, Founder & CEO, JUNTOS FINANZAS

Leaders of innovation in Silicon Valley emphasize the startup mentality of “failing fast”: prototyping rough, imperfect products and getting them out into the hands of your customers to see what works and what doesn’t. For established brands, however, such methods can appear reckless or impractical - especially in the space of financial services. Yet if used in the right way, rapid prototyping can transform the design and product/program development of ANY organization. Learn how both new and mature organizations can use rapid prototyping to reduce the time and cost of developing innovative products that resonate more deeply with underbanked customers. We’ll be discussing methods that organizations can use alongside traditional approaches to accomplish things that previously felt impossible, such as: Testing out a new mobile or web service without hiring developers or engineers. Validating a pricing model before a product even exists. Answering key questions with a pilot that takes 5 weeks instead of 5 months, on $5,000 rather than $50,000. Trying something radically different without risking the organization’s established brand.

Participants will be able to hear from their peers the creative, low-barrier ways that other organizations are testing out new ideas - and how iterative prototyping can make it much easier to design products that successfully resonate with their underbanked customers. Participants are encouraged to bring “design challenges” that they face - ideas they haven’t tested because of prohibitive cost - for the group to discuss and find ways to prototype on a fraction of the time or money.

7:30 AM - 8:30 AM
Do Well by Doing Good: Partnership Opportunities for For-Profits and Nonprofits to Offer High Quality Small-Dollar Credit (Compass Principle: Create Opportunity)
Sarah Chenven, CREDIT BUILDERS ALLIANCE

We will explore solutions to some of the challenges of providing high quality small-dollar installment loans to underserved consumers through possible non-profit CDFI loan fund and for-profit retail financial institution partnerships. Such challenges include navigating state regulatory requirements, efficient product delivery, access to capital, default risk, and cost. Solutions may include opportunities to leverage non-profits as trusted relationship brokers with access to subsidies and for-profit efficiencies of scale. Credit Builders Alliance and Progresso Financiero will co-facilitate the discussion, drawing on existing primary and secondary small-dollar credit research and CFSI’s Compass Principles to frame the conversation.

7:30 AM - 8:30 AM
Creating Opportunity with Financial Wellness Benefit Programs in Partnership with Fortune 500 Corporations (Compass Principle: Create Opportunity)
Jonathan Harrison, CEO, EMERGE WORKPLACE SOLUTIONS

Emerge provides employers throughout the U.S. with a financial wellness program, which is sold as an employee benefit program to mid to large employers with the help of distribution channel partners, from insurance carriers and brokers to labor unions and trade associations. The discussion will focus on best practices and ideas for partnership with Fortune 500 companies and current corporate partners will be on hand to share their insight on developing strong lasting collaboration.

7:30 AM - 8:30 AM
Designing UDAAP-Proof Products (Compass Principle: Build Trust)
Barak J. Sanford, Managing Director, PROMONTORY FINANCIAL GROUP, LLC

“Build Trust” is not just a good idea – it’s the law. Delivering clear and consistent value is the key to avoiding allegations of unfair, deceptive, and abusive practices. The roundtable will discuss how innovators can use the Compass Principles to UDAAP-proof their products. In the process, it will explore the notion that UDAAP is not a compliance issue at all, but a question of strategy, and that the best UDAAP experts are product designers themselves.

7:30 AM - 8:30 AM
Two New Innovative Approaches to Help Unbanked Individuals Connect to Banking in Meaningful and Productive Ways (Compass Principle: Build Trust)
I-Hsing Sun, NYC DEPARTMENT OF CONSUMER AFFAIRS OFFICE OF FINANCIAL EMPOWERMENT

Empowerment has been actively exploring when and how to connect people to banking, often strategically integrating financial education. One pilot is through a private sector partnership with H&R Block that tests how product features may influence how people use pre-paid cards. Secondarily, the pilot will study how a subset of participants who receive additional financial education fare. The second pilot is in collaboration with CFED and will study how access to banking and direct deposit initiatives, coupled with financial education, affects New York City’s largest transitional workforce program. This may inform how these systems can be reconfigured to channel thousands of unbanked New Yorkers into quality banking services. Both pilots are consistent with Compass Principle Two, and where smart products were designed and chosen to fit the needs of the target audience AND consider long-term sustainability for the financial institution. The roundtable session will focus on providing an overview of the programs, including the logic behind the education sessions, important features of the financial services, and implementation successes and challenges.

7:30 AM - 8:30 AM
Latino and Immigrant Access To Financial Services (Compass Principle: Embrace Inclusion)
Marisabel Torres, NATIONAL COUNCIL OF LA RAZA

During this roundtable, attendees will discuss the future of financial services and how they can better meet the needs of immigrants and Latinos, paying particular attention to the needs of new citizens. This discussion will be based on findings from a survey conducted in California by the National Council of La Raza. Survey results illustrate how Latinos, and specifically immigrants, interact with the financial market; these data also give insight into what the overall perceptions are in the Latino community toward banking and financial services. The financial inclusion of immigrants is not only a timely market opportunity but an equal opportunity imperative, yet many foreign-born individuals lack to access to safe and affordable products that are culturally relevant. This roundtable discussion will center on how the experiences of survey participants aligns with the Compass Principles standards for financial services.

7:30 AM - 8:30 AM
The Latest Innovations in Financial Inclusion from an International Perspective (Compass Principle: Embrace Inclusion)
Sarah Rotman, CGAP

When Green Dot bought a small bank hidden away in Utah last November, the first thing I thought of was Pakistan. That's because this business model where a nonbank buys a bank for reasons usually linked to regulation happened three years ago in Pakistan. The mobile network operator Telenor bought the much smaller microfinance bank Tameer in order to launch the mobile money product known as "easypaisa." Not only are mobile network operators launching products to reach the unbanked, but banks are innovating with prepaid cards, nonbanks are structuring new business models around electronic money, and almost everyone is working on the best strategy to effectively use agents to reduce cost and expand outreach. The market and regulatory context varies greatly from country to country, and admittedly the financial inclusion industry looks very different in the US than in other parts of the world. But there are also striking similarities. In this roundtable discussion, we will discuss the latest innovations in financial inclusion from an international perspective, and specifically discuss how innovators can build trust as they push new products, reach new customer segments, and use new channels. We can learn as much from the similarities that exist across countries as we can from the differences.

7:30 AM - 8:30 AM
Public-Private Partnerships to Promote Electronic Payroll (Compass Principle: Embrace Inclusion)
Jacob DuMez, SAN FRANCISCO OFFICE OF FINANCIAL EMPOWERMENT

Our presentation will focus on innovative municipal strategies to provide increased financial access and financial security through employer engagement and electronic payroll. A core example and discussion point will be our new direct deposit initiative, CurrenC SF, which is working with employers throughout San Francisco towards a goal of a fully electronic, paperless payday, helping to bring thousands of San Francisco households into the financial mainstream.

Through this initiative we hope to build a successful model for how municipalities can partner with business associations, nonprofits, financial service providers, and workforce leaders to bring financial empowerment and financial access into the workplace. CurrenC SF is an extension of our pioneering Bank on San Francisco program, and has the potential to build financial security for working San Franciscans (reducing the use of check cashers and fringe financial services in the process), saving money and building productivity for employers, and helping the City to “go green” by reducing waste and pollution.

7:30 AM - 8:30 AM
Fair Remittance Certification: Good for Consumers and Business (Compass Principle: Build Trust)
Annette LoVoi, APPLESEED

As the locus of major interaction between immigrants and the financial sector in the U.S., remittances hold a key role in the financial empowerment of the immigrant population. Appleseed is working with the remittance industry and NGOs in a “win-win” manner to craft a market-driven, stakeholder-based remittance certification system akin to Fair Trade certification for agricultural products and Forest Stewardship Council certification of forest products. This can create a “race to the top” for those companies wishing to adopt features attractive to consumers that can advance their business. Fair Remittance Certification would provide a new mechanism for encouraging and rewarding improved practices in the remittance provision industry. The project is congruent with the Compass Principles and can serve as an early application of all the principles.