The events of the last year and a half have shone a light on the scale of financial vulnerability in the U.S. Before the pandemic, millions of people did not have access to liquid savings or wealth building instruments. Thirty seven percent of Americans do not have $400 in liquid savings, and 78% of adults live paycheck to paycheck. These problems persist as we look to economic recovery. 

The scale of the challenge is so large that we need innovative, non-traditional solutions and cross-sector collaboration to address it in a meaningful way, and to create lasting change.  Commonwealth has been at the forefront of identifying innovative solutions and forging partnerships to scale them to unlock access to savings. From our work in the past — be it through the employer channel such as employers like UPS, recordkeepers like Voya, payroll providers like ADP, or directly through consumer-facing channels such as retailers like Walmart, we know that access matters. When people get access to convenient, high-quality solutions, they will use the solution. For example, when the Walmart Prize-Linked Savings solution was launched, it generated over $2 B in savings in the first two years.

What are some of these new innovative untapped channels that can create such access at scale? A good channel would be one that people use frequently and are comfortable making financial transactions with. At the same time, it needs to make business sense for the channel provider. 

Commonwealth has identified three channels in our work so far that fit these criteria: Telecom, mass transit, and contactless payments (e.g., payments providers, digital wallets, etc.). To further explore the opportunities of these new channels, we hosted a webinar moderated by Commonwealth’s Senior Innovation Manager Charvi Gandotra, with Steve Tae, Vice President, Global Cities, Enterprise Partnerships, Mastercard; Mouchka Heller, Lead, Shaping the Future of Mobility, World Economic Forum; and Ben White, Policy R&D, Plaid.

Here are three key takeaways from the webinar: 

1. The moment is right. The adoption of contactless and digital financial services is on the rise. As new contactless solutions are developed, it is imperative to keep the needs of LMI individuals front and center, and design solutions that help them build financial security. 
   White emphasized the limitless potential of data infrastructure and underlined how our conversation was highly timely as the use of fintech has increased and banking as an industry is expanding. 
   The panelists highlighted innovations across the globe to look to for inspiration as banking is redefined in the United States. Tae pointed to a mobile money success story in Africa where telco-led payments solutions offer savings and wealth building solutions, and Heller highlighted examples from South East Asia where mobility and tech start-ups now offer financial services.
2. Access matters. When quality solutions are made available in a convenient manner via a trusted entity, people will use the solutions. 
   Heller discussed the importance of transit as a means of economic empowerment and channel for financial inclusion, especially for unbanked or underbanked individuals. Transportation offers a unique opportunity for financial inclusion because trust is often higher in transit for low-income transit riders. Further, riders may perceive transit employees as being similar to them as opposed to employees in traditional banking, hence enhancing the chances of uptake and utilization of solutions offered through this channel.
3. Superpower of collaboration. Collaboration will be key to addressing a challenge of this scale. Tae highlighted an environment of enhanced collaboration in light of COVID-19 pandemic. As cities across the world face similar challenges, collaboration has accelerated to overcome the challenges. For example, cities are partnering with innovative vendors, NGOs, academia, governments, and technology sectors to design solutions for financial security for all. 
   We anticipate collaboration among a range of stakeholders — product providers, channel partners, data and information providers, infrastructure providers, researchers, convenors, and many more. 

Commonwealth is actively seeking partnerships for collaboration to test pilots for savings opportunities across these new channels. If you would like to learn more about how to get involved, please contact Charvi Gandotra at cgandotra@buildcommonwealth.org.