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Using insight and innovation to benefit low income households

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Financial services offer the potential to help manage fluctuations in income and expenditure, build resilience against future shocks, and provide the means for people to take advantage of opportunities.

Yet far too many lower income households and small businesses are struggling to achieve good ‘financial health’: for example, many experience cash-flow difficulties; fail to
save, and are not effectively planning ahead to determine and meet long-term goals. To address these problems we need financial services that are accessible, easy to use, and meet people’s needs over their lifetime. We also want people to have the skills and motivation to use financial services in ways which ensure they benefit meaningfully from them. 

Recent innovations in financial technology (‘FinTech’) provide significant opportunities to help us to realise this ambition (see the box on the following page). However, the potential for FinTech to deliver cannot be taken for granted and there remain a number of barriers both to fostering the development of innovations that meet the needs of lower income households and small businesses; and in getting successful innovations to scale. 

With financial support from the JP Morgan Foundation the Centre for Responsible Credit undertook to examine these issues through a programme of engagement with experts in the US and UK, involving telephone and face to face meetings and the conduct of a virtual workshop hosted using video conferencing technology in JP Morgan Chase offices in San Francisco, Chicago, Washington DC, New York and London on 22nd October 2015. 

The findings from this project provide a starting point to deliver more collaborative approaches capable of harnessing the knowledge that non-profits and the community finance sector hold about the financial needs and behaviours of lower income households and small businesses and linking this to the technological expertise of the commercial FinTech sector.

Last updated | 
15 March 2016