Tech companies are developing new products and platforms for people to save and build wealth, opening up new possibilities to help build financial stability. However, these products are not always reaching low- and moderate-income Americans and could end up only leaving them farther behind in this time of growing inequality.
With that in mind, a new consortium of nonprofit organizations has challenged the financial technology community to ensure its work lifts up the millions of Americans struggling with financial insecurity today. The group, Nonprofit Leaders in Financial Technology (nLIFT), today released its vision for the future of financial technology in a new report “Fulfilling the Promise of Fintech: The Case for a Nonprofit Vision and Leadership.”
The report argues that fintech has the potential to improve the lives of Americans who are struggling financially and that nonprofits that represent these individuals and their communities have an important role to play in making this happen.
nLIFT is comprised of seven highly respected nonprofit organizations from across the country that share a goal of increasing financial inclusion through technology-driven solutions. They are Commonwealth, EARN, The Financial Clinic, Mission Asset Fund, MyPath, National Federation of Community Development Credit Unions, and Neighborhood Trust Financial Partners.
“The power of technology has huge potential to deliver better, safer, faster, and more affordable financial solutions for cash-strapped consumers,” said Ida Rademacher, Executive Director of the Financial Security Program at the Aspen Institute. “But this outcome is not inevitable, and nLIFT members are in the position to influence the direction to better serve lower-income households. As the new nLIFT manifesto states, ‘Like any technology, the direction fintech will take depends on who designs it, for what purpose, and its creators’ incentives.’”
The need for new tools to support financial inclusion is clear: according to recent research 40 percent of Americans could not cover an unexpected $400 expense and 25 percent have no retirement savings.
“While new technology can help build prosperity, we need to make sure that this prosperity reaches everyone, including women and people of color,” said Joyce Klein, Director of FIELD. “nLIFT has the opportunity to bring these voices to an important conversation as financial technology grows and expands.”
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