SAN FRANCISCO (11/25/14)--Uncertain income and trouble managing expenses create cash flow problems for households nationwide.
Moreover, nearly one-third of Americans encounter significant variation in their income over the course of a given year. This suggests that household liquidity is not a problem that affects just part-time, self-employed and seasonal workers--the reach and impact is far wider.
Armed with this knowledge, The Financial Solutions Lab at the Center for Financial Services Innovation (CFSI) announced that household liquidity--the management and alignment of income and expenses--will be the focus of its first innovation challenge.
"Household cash flow challenges create a stressful and often expensive balancing act for millions of American families," said Sarah Gordon, CFSI vice president of innovation labs. "But there are talented entrepreneurs and nonprofit leaders who are leveraging technology to solve this problem. By focusing on this issue for our first challenge, the Financial Solutions Lab can serve as a powerful platform to help innovators build new solutions."
Exploring innovative ideas related to improving day-to-day income and expenses, building emergency funds and improving open access to lower-cost, higher-quality small-dollar credit options are among the ways in which the Financial Solutions Lab community will approach solving for household liquidity challenges.
The Financial Solutions Lab is a cross-industry initiative supporting the development of innovative, technology-enabled strategies, products and services that align with consumers' financial needs.
In addition to announcing the focus area of household cash flow, CFSI is assembling a group financial technology entrepreneurs, nonprofits and consumer advocacy groups, behavioral economists and academics to provide ongoing guidance, share best practices and support the development of scalable financial solutions based on the Financial Solutions Lab's innovations.
Early next year, the lab will announce the opening of the first innovation challenge focused on household cash flow. The challenge will provide winning organizations with capital, technical assistance and connections to industry leaders to assist them in building better products and services that can have a national impact.