The Center for Financial Services Innovation has announced it will receive millions of dollars from JPMorgan Chase's philanthropy unit to launch a new division that builds on the work the association has been doing for 10 years: identifying financial problems and cultivating technology that is designed to solve issues plaguing the majority of Americans.
The bank committed $30 million over the next several years for the new so-called Financial Solutions Lab.
The investment will be used to fund a five-year initiative in which the newly formed lab division will host tech events designed to test and scale innovations centered on improving Americans' financial health in three categories: savings, credit and asset building.
CFSI's lab division - which exists as a virtual site - will get an advisory team that will include a variety of experts, bankers welcomed, and host its first tech challenge by yearend. Winners of such competitions will get capital, technical assistance and third-party evaluation.
Firms IDEO.org and ideas42, in addition to Chase, will serve as strategic advisors, while CFSI will run the overall program.
CFSI already has a VC unit that invests in fintech companies. It has teamed up with New York University to profile low-and-moderate-income Americans. It has hosted hackathons to inspire new ideas.
The Financial Solutions Lab will be an extension of that work with some twists: CFSI plans to focus on more specific financial problems with its tech challenges, for example. In the past, the association has challenged coders to, say, design an app that helps people save. Now, it will pitch them on a more specific issue like income volatility and beseech them to create ways to help people better manage cash flow.
CFSI also plans to broaden the context of who these tech projects help, which extends well beyond the hotly debated term "underbanked."
"In the wake of the financial crisis, just thinking in terms of unbanked or underbanked doesn't do the problem justice," says Jennifer Tescher, president and chief executive of CFSI. "We have to get away from 'us versus them.' The majority of Americans are living paycheck to paycheck."
The new lab sponsored by Chase is but the latest example of a financial services company helping foster tech efforts designed to attack personal financial problems.
American Express announced in March it planned to launch a lab in the summer that would focus on products designed for underbanked individuals.
The ATM Industry Association announced a new dedicated forum that discusses ways the ATM could help cater to underbanked individuals - such as using the machines to send money to someone or pay bills.
The U.S. Treasury is creating an Innovation Fund for individuals looking to develop new strategies to promote financial access and financial capability, among other things.
Then, the Federal Deposit Insurance Corp. is urging banks across the country to better evaluate mobile tech that could broaden financial services to a larger audience.
Such efforts underscore the problem's vastness and importance.
"There is no one organization that can solve this," says Tescher.