for emergencies.2 ... /NEWS/0,,contentMDK:23172927~pagePK:34370~piPK:34424~theSitePK:4607,00.html. 2 FINRA Investor Education Foundation. 2013.
AT CFSI WITH FOUNDING PARTNER JPMORGAN CHASE & CO.
Around the world, greater access to financial products and services and adequate information about good financial habits would help consumers overcome daunting obstacles to financial security.
Almost 2.5 billion people across the globe don’t have a bank account, including about 75 percent of the world’s poor.1
More than half of Americans do not have savings reserved for emergencies.2
One quarter of U.S. households rely on costly non-bank services to manage their everyday finances, causing low-income families to spend the same share of their income on interest and fees as the average family spends on food.3
Financial literacy efforts must evolve and go beyond simply raising awareness. It’s time for a new approach that combines timely information with innovative tools that turn knowledge into action. It’s time for financial capability.
JPMorgan Chase & Co. is committing $30 million over the next five years to create the Financial Solutions LabSM to identify, test and scale promising innovations to help address consumer challenges. The Financial Solutions Lab will be managed by the Center for Financial Services Innovation (CFSI) in collaboration with JPMorgan Chase. ideas42 and IDEO.org will serve as strategic advisors supporting the Lab’s design, implementation and capacity to yield sustainable, scalable solutions.
THE FINANCIAL SOLUTIONS LAB WILL:
IDENTIFY SOLUTIONS A series of competitions will encourage social entrepreneurs to identify and enhance technologyenabled innovations that address consumer needs. Winning ideas will be supported with capital, technical assistance and thirdparty evaluation.
CREATE CONNECTIONS Innovators from the fields of technology, behavioral economics, nonprofit services and design will come together for ongoing roundtables and summits, share best practices and develop scalable financial product solutions.
MEASURE IMPACT Outcomes and impact will be measured and evaluated to improve efforts to increase financial security and contribute actionable learnings to the broader field of financial capability.
1 D ata released by the World Bank. http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23172927~pagePK:34370~piPK:34424~theSitePK:4607,00.html 2 FINRA Investor Education Foundation. 2013. “Financial Capability in the United States: Report of Findings from the 2012 National Financial Capability Study.” Washington, DC: FINRA Investor Education Foundation. http://www. usfinancialcapability.org/downloads/NFCS_2012_Report_Natl_Findings.pdf 3 Office of Inspector General, United States Postal Service. 2014. “Providing Non-Bank Financial Services for the Underserved.” White Paper. Washington, DC. http://www.uspsoig.gov/sites/default/files/document-library-files/2014/ rarc-wp-14-007.pdf. Data from the Bureau of Labor Statistics showing that the average household making approximately $65,000 a year spends $6,500 on food costs for the year. For a family making between $20,000-$29,000 a year, the average annual food cost is about $4,200.http://www.bls.gov/cex/2012/combined/income.pdf
WHAT IS FINANCIAL CAPABILITY?
An increasingly complex marketplace of options and information, coupled with a movement away from defined benefit retirement accounts, has created a greater need for consumers to be in control of their finances. At JPMorgan Chase, we believe that traditional financial literacy efforts must evolve in order to meet this consumer need and increase financial capability.
INFORMATION
BEHAVIORAL INSIGHTS
Financial capability is the use of timely, relevant information in combination with behavioral insights, affordable tools and skills to effectively manage daily finances. It draws on cuttingedge best practices that drive demonstrable, lasting change in financial behaviors to help people achieve a more secure financial future.
TOOLS & SKILLS
HOW DO WE ENCOURAGE FINANCIAL CAPABILITY?
Time the delivery of products and services to key financial moments
Pair relevant, engaging information with products and services
Employ choice architecture
Incorporate humancentered design
Leverage technologies to increase reach and improve efficiencies
