Approximately 70 million American adults are considered unbanked or underbanked, and are forced to manage their money through costly alternative financial services that operate outside of the traditional banking system. These services, such as check-cashers and payday loans, impose large fees that often accumulate over time, which can trap consumers in cyclical and deepening debt. An alarming number of Americans are falling into this debt trap, experiencing small obstacles that can escalate into long-term financial crises.
As part of our ongoing work to address this problem and increase financial inclusion, we’re excited to announce the launch of the Financial Innovation Lab, the start of a new partnership with American Express. The Lab is a unique venture that brings together leading researchers, practitioners, and business developers. Through the Lab, it will be possible to develop and test scalable technological innovations designed to improve consumer financial behaviors and attitudes using rigorous research and the latest insights from behavioral science on a major financial platform.
After initial ideas for potential solutions are submitted to the Lab, up to five teams will be selected by a panel of judges to implement experiments through the American Express Serve prepaid card platform with an opt-in population of Serve accountholders.
Financial Innovation Lab participants will also be invited to attend a workshop with Serve design, product development, fieldwork, and technology staff. The workshop will feature insights from ideas42, IDEO.org, and CauseLabs, to help participant teams refine their proposals and develop a framework for understanding and applying the Serve platform tools to their own product development processes.
This new partnership between ideas42 and American Express represents an unprecedented opportunity to combine behavioral science and academic research on a major financial platform. When almost half of Americans report that they do not know how they would come up with $2,000 in an emergency, the potential to positively impact the financial behaviors and future of millions of consumers with a streamlined, low-cost prepaid card platform is incredible.
The submission period for letters of intent is now open. All applications should be emailed to filab@ideas42.org by September 26th, 2014 at 7:00 pm EST. Click here to learn more about the Lab and how to apply. To learn more about financial exclusion in America, we highly recommend checking out the documentary Spent: Looking for Change. To learn more about the potential impact of scaling financial solutions, click here for our recent white paper.
