Who is CFSI?
The Center for Financial Services Innovation (CFSI) is an American non-profit organization originally based in Chicago. It specializes in financial innovation and works to connect consumers who are classified as unbanked or underbanked with the right resources and financial service providers to meet their individualized needs.
A Brief History of CFSI
CFSI was originally founded as an affiliate of the now-defunct Shorebank Corporation, an American based international community development and an environmental bank holding company that went out of business on June 29th, 2012. It started out as a research project conducted by a division of Shorebank in 2002 on behalf of the Ford Foundation, who were looking to understand and meet the needs and demands of financial services targeting low-income consumers. The project found that millions of American citizens do not have adequate access to affordable financial services and products that meet their needs as consumers, and these findings have since been replicated in other research.
According to the most recent national survey conducted in 2015, nearly 27% of Americans do not have a bank account or report having insufficient access to the products and services offered by major banks, classifying them as underbanked. While there are many reasons that accommodate those without a bank account—or affiliated services, such as a line of credit—a majority of consumers reported that they did not use traditional banks due to their physical location, education level, having a low or unsteady income, or because of language barriers.
To try and bridge the gap to effectively provide financial services to people of all income levels and locales, the Center for Financial Services Innovation work alongside others in the industry to start conversations about improving the financial well-being of those currently outside of the system. CFSI also contributes to the industry in a number of ways, with a primary focus on education, brokering, and investing.
In their educational efforts, CFSI conducts research projects similar to the one that led to its founding. They share the results of their research freely on their website with consumer and industry professionals alike, doing what they can to spread the information as widely as possible to help improve the industry and to make financial services accessible to consumers who are currently underbanked.
As a broker, CFSI focuses their attention on helping clients and organizations make connections within the industry. Previously, they have worked with accounting and tax preparation firms to help them reach and work with underbanked clients.
Through their investments, CFSI provides funding to both for-profit and nonprofit organizations that offer aid to unbanked and underbanked Americans and those who are working to close the gap. CFSI also “invests in the future of the industry,” providing regular grants to those conducting financial services research, and sponsoring the yearly Underbanked Financial Services Forum, which is the largest event in financial innovation. The event consists of attendees from around the world and aims to start a dialogue on the current state of the industry, providing education and working to create new and effective strategies within financial services to improve outreach and meet the needs of the nearly 30% of the population that is underserved by or uninvolved with banks and other financial institutions.
In April 2013, CFSI announced via press release that they would be distributing $2.5 million dollars in grants through their Financial Capability Fund II to non-profits that seek to educate consumers on important financial topics, like improving one’s credit, avoiding costly bank fees, effectively managing your finances to allow for the maximum savings, and so on. These grants were made possible through funding by and collaboration with the Charles Schwab Bank, the Citi Bank Foundation, Capital One, and the NYSE Euronext Foundation.
Since their founding in 2004, CFSI has helped more than 165 million Americans improve their financial health and connect with the products and services they need. And nearly 25% of the consumers CFSI has worked with have been low income, underbanked, or unbanked households.
Steve M. on April 10, 2018