By Romy Parzick, Manager, Innovation and Research, Center for Financial Services Innovation
Our first Principle is “Embrace Inclusion: Responsibly Expand Access.” When this Principle is applied, consumers, including those from traditionally underserved groups or communities, are creatively reached and well-served with a relevant suite of quality, affordable financial services, provided in a dignified, comfortable, and convenient manner.
The word “responsibly” is an intentional modifier to “expanding access”? We all know too well that the subprime mortgage crisis expanded access tremendously, but in ways that were irresponsible and ultimately disastrous for business, communities, and families. Expanding access in a responsible way means critically evaluating your strengths and weaknesses as a provider, assessing the marketplace demand for your product or service, and thinking creatively about how to reach as many consumers as possible with a solution that is mutually sustainable.
Given the Census Bureau report released last month showing that poverty numbers rose by 2.6 million last year, bringing the number of Americans living below the official poverty line to 46.2 million people, there is both social and business value to providers embracing inclusion.
I like to think about this Principle in terms of lowering barriers-to-entry. As applied to traditionally underserved consumers, barriers-to-entry may come in many forms, including: minimum account balances, hours of operation, credit score requirements, Chex systems reports, and Know Your Customer identification requirements. Providers who embrace inclusion design and deliver their products and services in a manner that successfully manages risk without unnecessarily limiting access to potential consumers.
Watch the Embrace Inclusion video on our website to learn more!
What providers have you seen do this well? Tell us about them!
By Romy Parzick, Manager, Innovation and Research, Center for Financial Services Innovation
The Compass Principles initiative is currently in the Feedback Phase, which will continue into early 2012. During the Feedback phase, CFSI is engaging with a wide variety of marketplace actors to gather insightful, experience-based feedback. The ideas offered by the Compass Principles represent a beginning, and over the next several months, CFSI is seeking to:
- refine the ideas offered by the Compass Principles (as needed),
- collect examples of best practices, products, and services exemplifying these ideas, and
- develop implementation tools and strategies for adoption of the framework.
We are gathering intelligence through a variety of means, including one-on-one conversations with experts, meetings with our Advisory Council(s), and dialogue via our online channels.
CFSI wants to hear from you. To share thoughts and insights, you can:
- register and comment directly on this website
- tweet using our hashtag #CompassP
- post to our LinkedIn page
- contact someone on the CFSI Compass team,
Is your company already providing a product or service that lives up to these Principles? Let us know and we may spotlight its great work on our website. Do you have a strong reaction (positive or negative) to one of the Principles? Tell us why! For each Principle, do you have thoughts about innovative practices or examples that should be highlighted? Add them to the website! Does your company want to be a champion for the Compass Principles? Contact a CFSI Compass team member.
We envision a future in which financial services actively contribute to making people’s lives better, and deliver sustainable value to all providers and consumers. That’s why we are asking you to join us in the co-creation of the Compass Principles.
By Romy Parzick, Manager, Innovation and Research, Center for Financial Services Innovation
The Center for Financial Services Innovation (CFSI) envisions a U.S. financial services marketplace that actively contributes to improving people’s lives and delivers sustainable value to all consumers and providers. In these times, when many Americans are struggling financially and access to high-quality financial services is eroding, this is an especially bold vision. But, financial services are a critical driver of our economy and of the financial health of communities and consumers, especially those hardest-hit by the economic crisis. It is vital that financial services become a positive force in people’s lives.
CFSI works with industry, policymakers, consumer advocates, and researchers to innovate real solutions that enable the market to work better for consumers, their communities, and industry. We believe the best way to tackle industry-wide issues is to bring all important stakeholders to the table as problem-solvers. It is with this belief that CFSI has begun a journey to co-create the Compass Principles, in collaboration with providers, consumer advocates, and other experts.
The Compass Principles are aspirational guidelines that affirm a framework for excellence in the design and delivery of basic tools that people use to manage their daily financial lives. The 4 Principles are:
1. Embrace Inclusion: Responsibly Expand Access
2. Build Trust: Deliver Clear and Consistent Value
3. Promote Success: Link Smart Design with Actionable Guidance
4. Create Opportunity: Provide Options for Upward Mobility
What do these Principles envision for consumers? When companies embrace inclusion, it means consumers, including those from traditionally underserved groups or communities, are creatively reached and well-served with a relevant suite of quality, affordable financial services, provided in a dignified, comfortable, and convenient manner. When companies build trust, it means consumers are able to clearly understand and derive value, without pitfalls, from financial products and services. When companies promote success, it means consumers are empowered to make wise money choices. Empowerment is driven by smart product/service design coupled with proactive guidance that is relevant to consumers’ specific concerns and financial situations, coincides in a timely fashion with key life decisions, and is immediately actionable. When companies create opportunity, it means consumers are actively encouraged to pursue appropriate options that create opportunities for increased financial prosperity.
The marketplace as a whole can be transformed if each provider does its part to contribute to the Compass Principles vision by designing and delivering financial products and services that truly embody these Principles. The goal of this initiative is not to lead consumers to the same products and services. These Principles are about guiding, enabling, and encouraging the right access for consumers, and meeting their needs with new and creative solutions that help them achieve their financial goals.
CFSI is currently engaging with a wide variety of marketplace actors to gather insightful, experienced-based feedback so that the Principles reflect the best thinking and greatest optimism of the marketplace. Over the next several months, CFSI is seeking to refine the framework and collect examples of products and services that exemplify these ideas.
Today, there is real concern from customers, employees, the media, and regulators about the value that financial services providers deliver. An important opportunity exists for the financial services marketplace to define how industry can be successful by making people’s lives better.
CFSI is looking for leaders across the financial services landscape to participate in the creation of, and commitment to, the Compass Principles.
Tell us what you think.
