The Center for Financial Services Innovation grew out of a research project conducted in 2002 by a division of ShoreBank on behalf of the Ford Foundation. It examined the gap between supply and demand of financial services for low-income consumers as well as potential strategies to close it.
The project showed that millions of Americans are faced with an inadequate supply of well-designed, reasonably-priced financial products and services to both meet short-term needs and provide opportunities for longer-term wealth creation. Many were already saving, or had the potential to save. Most were transacting financial business through one mechanism or another, to the best of their ability. At the same time, this demographic was growing, and showed tremendous potential as a market segment. Innovation was already occurring in the marketplace. But just as there were sizeable obstacles to consumers seeking financial services, there was a demonstrated need for some medium by which to build the customer and segment knowledge, relationships, products and scale that would enable the financial services industry to transform their business models and practices in order to serve these consumers both effectively and profitably.
The Center for Financial Services Innovation was created to address these challenges, initially funded by the Ford Foundation and housed as an initiative of ShoreBank. Now an independent organization, CFSI continues to receive support from the Ford Foundation, as well as other nonprofit organizations. It also obtains revenue from some of its programs and activities, in keeping with its belief that entrepreneurship and industry play a vital role in achieving financial services access for underbanked consumers. Its goal remains unchanged: to open the doors to financial stability and prosperity to all Americans.