Financial Solutions Lab is launching its 2022 Accelerator Challenge to support Latinx, Black and underserved communities
Now in its eighth year, the initiative aims to identify and advance solutions toward supporting low-to-moderate income communities through expanded access to benefits and financial tools.
The Financial Solutions Lab is now accepting applications from financial technology companies and nonprofits focused on helping low-to-moderate income (LMI), Latinx and Black communities.
An initiative from the Financial Health Network, in collaboration with JP Morgan Chase and Prudential Financial, the goal of the accelerator challenge is to expand access to benefits and financial tools that help underserved communities maintain key safety news and improve their financial health.
Nearly two years since the start of the pandemic, America’s safety nets have drawn thin and communities that were already at high risk prior to the pandemic are facing outsized economic impacts.
According to a 2021 financial health trends report, U.S. households with annual incomes of less than $30,000 are more than twice as likely to be financially unhealthy than higher-income households, which leaves many families behind on paying bills, forcing them to prioritize immediate financial needs over planning for the future.
While the stimulus payments and child tax credits have provided a positive immediate impact, systemic barriers remain and continue to prevent LMI, Latinx and Black communities from building and maintaining long-term financial health.
The economic impact of the pandemic has taken a higher toll on communities of color, and have resulted in depleted emergency savings, the greatest job losses in frontline jobs, rising healthcare costs, and limited access to workforce retirement savings plans.
A June 2021 research study from the JPMorgan Chase & Co. Institute found that low-income Black and Latinx families and women of color experienced the fastest depletion of their cash balances gained during COVID.
With the increased unemployment rate brought on by the pandemic, Black Americans seeking unemployment benefits were approved 73% of the time, compared to 80% for White Americans, according to national census surveys conducted by the Government Accountability Office.
According to the American Retirement Association, 52% of Black and 68% of Latinx Americans do not currently have access to a workplace retirement plan, compared to just 40% for White Americans.
The statistics show a racial and economic gap that makes it more difficult for many underserved communities to reach financial stability.
This year’s Accelerator challenge will focus on addressing those gaps and identifying innovative solutions that help LMI, Latinx and Black communities better navigate and benefit from the existing collection of financial health benefits, products and tools.
Hannah Calhoon, Vice President of Innovation for Financial Health Network, highlighted how oftentimes accessing benefits require consumers to navigate complex systems and option sets with nontransparent terms, extensive requirements and limited accessibility.
“There is a great need and potential for innovative solutions improving user experiences that make financial health benefits and tools more accessible,” she said.
This year’s Accelerator will prioritize fintech startup founders and teams with a lived experience of the issues they are addressing, and companies demonstrating a commitment to operationalizing Diversity, Equity, and Inclusion principles within their organizations.
Some of the relevant solutions for this year’s Accelerator cohort include, but aren’t limited to:
- Optimization of public and private benefit experiences and tax system navigation
- Enhanced enterprise and consumer applications to manage healthcare costs and decisions
- Affordable services to help address obligations within the legal system
- Stronger resources and safety nets to protect against income volatility and economic shocks
- Improved access to retirement preparation and navigation tools
Sarah Willis Ertur, Director of Financial Health at JPMorgan Chase, spoke about how those solutions align with the goals of JP Morgan Chase’s $30 billion racial equity commitment, which work to tackle major barriers to wealth creation and an inclusive recovery from the pandemic.
“Fintech innovation has the potential to support consumers navigating complex financial and social systems that help build financial health, especially for those who have suffered most during the pandemic — Black and Latinx communities,” she said.
“With nearly half of Americans struggling with financial hardship resulting from the pandemic, we need to do more to ensure equal access to financial tools and systems, especially for the most vulnerable,” added Sarah Keh, Vice President of Prudential Inclusive Solutions.
Each selected organization will receive up to $100,000 from the Financial Health Network, product and user behavioral insights to help inform development and market strategy, guidance to navigate the legal and regulatory fintech environment, insights on impact and customer financial health measurement, resources for external marketing and communications, mentorship from financial services and financial health experts, support to further diversity, equity, and inclusion, and more.
Interested fintech startups and organizations are able to apply until Dec. 20, 2021.
“There is tremendous opportunity for innovative solutions to help fill the gaps in our social safety net and give people the flexibility they need to continue to build financial health,” said Keh.
For more information on the 2022 Financial Solutions Lab Accelerator, click here.