$3M FinLab Backed by JPMorgan Aims to Improve Consumers' Financial Health

As banks have been getting their hands into accelerators and other ventures involving promising startups, it is no surprise that JPMorgan is backing one of those. JPMorgan has been noticed to get actively involved in FinTech ventures, and the FinLab may open further opportunities for the bank to connect with bright entrepreneurs.

(Press Release) San Francisco – (Business Wire): Today, the Financial Solutions Lab (FinLab) at the Center for Financial Services Innovation (CFSI) with founding partner JPMorgan Chase & Co. announced its $3-million, year-two challenge while celebrating the culmination of its first-year challenge with an inaugural group of nine FinTech innovators. FinLab, a $30-million, five-year virtual lab initiative, unveiled "Financial Shocks" as the theme for its second-year challenge.

For its second challenge, FinLab announced that it is seeking innovators providing solutions that help Americans prepare for financial shocks. The importance of this new challenge topic was determined using CFSI’s Consumer Financial Health Survey as well as research from other thought leaders, including a Pew Charitable Trusts study that revealed that 60% of Americans experienced a financial shock in the past year, and that only six in ten households had enough liquid savings to cover an unexpected expense of $2,000. A recent 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 financial shocks may cause consumers to draw upon their long-term and retirement savings, sell assets or default on their existing debts. A brief detailing the choice of this challenge topic was released today by CFSI and can be found here:

During the event, year-one FinLab innovators were on hand to talk about the consumer impact of their solutions, their experiences with the lab, and how FinLab is building an ecosystem for FinTech innovators promoting financial health. FinLab’s first challenge, focused on solving consumer cash flow issues, drew nearly 300 applications from companies and nonprofit organizations serving more than 10,000,000 Americans combined.

Since their acceptance into the lab, the nine members of FinLab’s inaugural group have improved their products and scaled their businesses to help more Americans improve their financial health. FinLab provided each member with $250,000 in capital, support from FinLab operating partners IDEO.ORG 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.

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.

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.

Starting today, FinTech innovators interested in joining FinLab’s sophomore year can complete and submit an application at before April 7, 2016. Each application will be closely reviewed by an expert, cross-sector group 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.

The announcement was made at a private event in San Francisco, which gathered FinLab staff, members and partners as well as notable venture capitalists and FinTech industry players.

About the Financial Solutions Lab:

The Financial Solutions Lab is a $30-million, five-year initiative managed by the Center for Financial Services Innovation (CFSI) with founding partner JPMorgan Chase & Co. to identify, test and expand the availability of promising innovations that help Americans increase savings, improve credit and build assets. The lab will launch a series of competitions to identify solutions to specific consumer financial challenges. It will provide incentives for entrepreneurs, businesses, and nonprofits to enhance financial products and services that address these challenges and improve consumers’ financial health.

About the Center for Financial Services Innovation:

CFSI is the nation’s authority on consumer financial health. CFSI leads a network of financial services innovators committed to building a more robust financial services marketplace with higher quality products and services. Through its Compass Principles and a lineup of proprietary research, insights and events, CFSI informs, advises and connects members of its network to seed the innovation that will transform the financial services landscape.