MADISON,, Wis. The Filene Research Institute received a $700,000, 30-month grant from the Ford Foundation to develop and implement an accessible financial services incubator. The incubator will test, package and scale innovative, viable financial products that benefit low-and-moderate-income consumers, according to Filene.
Filene said it will now work to select 25 U.S. credit unions and five products for an 18-month pilot, beginning November 2013. The grant comes as one-in-five households, or 24 million American homes, are underbanked and lack access to affordable financial services. The socioeconomic disparity is compounded by the racial and ethnic disparities among persons denied credit; 53% of African-Americans, 43% of Hispanics and 44% of Native-Americans are underbanked.
“Mainstream financial institutions consistently fail to improve access for these vulnerable persons to affordable credit and other essential financial products,” said Mark Meyer, CEO of Filene. “Consequently, alternative financial services providers have ample opportunity to exploit underbanked individuals.”
Filene said it plans to test, package and deliver viable financial products through the incubator’s three discrete phases:
- The lab testing promising product ideas
- The factory manufacturing innovations and packaging products for mass adoption
- The marketplace distributing products through in-person and open-source online marketing
The incubator will use credit unions as the proving ground for innovative products to test their viability with mainstream financial institutions. An advisory panel of financial institution staff, researchers and industry analysts will ensure the viability of the selection, testing and marketing of the incubator’s product ideas, Filene said.
Credit unions interested in testing potential incubator products and organizations with potential product innovations for the incubator can learn more and apply here <
