May 29, 2014 About the Center | Research | Experts | Contact
A Capital Idea
Research and Commentary on Financial Capital and Its Impact on People and Places

Building the Path to Global Prosperity through Financial Capability and Inclusion

A staggering 56 percent of all Americans lack an emergency fund. Even a minor financial setback can put the financial stability of more than half the families in this country at risk.

This is one of many findings in a report released today by UNC and JPMorgan Chase & Co. that describes why helping economically fragile consumers better manage their finances is critical not only for individuals, but also employers, taxpayers and the economy.

Research also shows that even households with modest incomes can manage their finances more successfully when given the right information and financial products at the right time, delivered in the right form.  

The report, All In: Building the Path to Global Prosperity through Financial Capability and Inclusion, was co-authored by Lucy S. Gorham, senior research associate for asset-building programs and policy for the UNC Center for Community Capital, and Janis L. Bowdler, senior program officer of financial capability and affordable housing for the JPMorgan Chase Foundation.

The report was released in connection with JPMorgan Chase's announcement of a new $30 million, five-year initiative to improve financial capability. It explains how financial capability combines well-designed products and relevant information with insights from design, technology and behavioral economics to promote positive financial behavior

"Creating a more inclusive financial system will improve the well-being of the world's most vulnerable families, strengthen local and national economies, and empower future generations to achieve their goals," the authors conclude.

Appropriate solutions vitally important

American households spend $89 billion dollars on interest and fees from alternative financial products each year – money that could be put to more productive uses, such as higher education or retirement.

This is important because having savings allows families to move up the economic ladder. So it's a win-win when products are designed around consumers' needs to enable families to save more and better manage their money.

There are many challenges to financial security. But the lack of appropriate and affordable financial products presents a major barrier.

The impact of financial insecurity on individual families can be devastating, and it also has wider effects. It costs U.S. employers an estimated $8.7 billion dollars a year in lost productivity and has delayed the economic recovery.   

Time is Right for Financial Capability

At this moment in time, emerging technologies and behavioral insights create new opportunities to deliver the right products at the right time to consumers.

As the report illustrates, we're seeing the success of programs, such as those that allow taxpayers to use their tax refunds to purchase savings bonds or deposit them in a savings account at the time they file their tax returns.

We're seeing the greater impact that comes when students receiving financial education in school also have the opportunity to open an account.

These and other examples suggest that there are huge opportunities to improve the lives of millions of families through developing and deploying many more of these types of products and services.

While challenging, this endeavor has the potential to change the life trajectory of billions of people, creating widespread change that will have real impact for families and communities.

Solutions Lab Holds Great Promise

JPMorgan Chase has teamed with the Center for Financial Services Innovation to launch The Financial Solutions LabSM designed to foster new ideas and innovations that will help consumers increase savings, improve credit and build assets.

Over the next five years, the lab will undertake a series of activities that support social entrepreneurs in developing and testing technology-enabled solutions that help underserved consumers overcome many of the challenges identified in this report and, ultimately, improve their financial health.

The lab will serve as a hub that deploys capital, expertise, technical assistance and design processes to bring innovations to scale and provide a source of R&D for the field. JPMorgan Chase employees will provide advisory services on the design, implementation and execution.   

Three key elements of this initiative offer particular promise:
  • It is research-based, building on what we know works and does not work to help families become financially secure.
  • It incorporates continuous evaluation, which should accelerate the learning and roll-out of innovations that are developed.
  • It will leverage and integrate the expertise and resources of multiple stakeholders, including the financial sector, policy makers, nonprofits, advocates, educators, social entrepreneurs and researchers.

Download the report.

The UNC Center for Community Capital is the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. The center's in-depth analyses help policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people, more effectively. For more information, visit


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