Financial Solutions Lab launches accelerator challenge to address racial wealth gap – Finextra
The eighth Accelerator program is now accepting applications from financial technology companies and nonprofits creating innovative solutions to expand access to financial health benefits and tools.
The Financial Solutions Lab, an initiative from the Financial Health Network in collaboration with JPMorgan Chase and Prudential Financial, announced today its eighth accelerator Challenge. The Accelerator seeks applications from financial technology companies focused on helping low- to moderate-income (LMI) and Black and Latinx communities expand access to benefits and financial tools that help them to maintain key safety nets and improve their financial health. For more information on our next Challenge and how to apply, visit our website. Applications are due December 20, 2021.
Almost two years into the pandemic, U.S. consumer financial safety nets continue to be challenged.
• U.S. households with annual incomes less than $30k are more than twice as likely to be financially unhealthy than higher-income households, leaving many families behind on paying bills such as rent and mortgage payments, prioritizing immediate financial needs over planning for the future.
• While public supports such as stimulus payments and child tax credits have had a positive immediate impact on LMI and Black and Latinx communities’ liquidity, systemic barriers continue to prevent these communities from building and maintaining long-term financial health.
The economic impacts of the pandemic have taken a higher toll on communities of color, particularly Black and Latinx communities, who face depleted emergency savings, experienced the greatest job losses in frontline jobs, are managing rising healthcare costs, and have limited access to workplace retirement savings plans. For example:
• Low-income Black and Latinx families and women of color experienced the fastest depletion of their cash balances gained during COVID.
• Black Americans seeking unemployment benefits are approved 73% of the time compared to 80% for White Americans.
• 52% of Black and 68% of Latinx Americans do not currently have access to a workplace retirement plan versus just 40% for White Americans.
This year’s Accelerator will be focused on addressing these gaps and identifying innovative solutions helping LMI and Black and Latinx communities to better navigate and benefit from the existing web of financial health benefits, products, and tools.
“Too often, accessing benefits requires consumers to navigate complex systems and option sets, many with opaque terms, extensive requirements, and limited accessibility,” said Hannah Calhoon, vice president, Innovation, Financial Health Network. “There is a great need and potential for innovative solutions improving user experiences that make financial health benefits and tools more accessible.”
Solutions relevant for this year’s Accelerator cohort include, but are not 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 …….