Why Mission-Minded Fintechs May Be the Key to Closing the Savings Gap

SaverLife CEO, Leigh Phillips, published a paper in the Federal Reserve Bank of San Francisco’s Community Development Innovation Review arguing that mission-minded fintechs can be key to closing the savings gap.

Financial technology, or “fintech,” companies present a powerful opportunity to apply emerging technologies to deep-rooted financial inequalities. I see the clear potential for fintech to create inclusive products that boost savings every day at SaverLife. SaverLife is a nonprofit fintech with a mission to help families build emergency savings and long-term financial stability. I joined the team in part because I recognized that, as new tech-driven financial products and services emerged, low-income communities were at risk of being excluded from the benefits of technology.

When I think about how we can enact real financial change for our members, I think of women like Laurynn, a single mom and small business owner whose income and ability to save was decimated by the pandemic. But, she told us in October 2020, “I’ve still been saving when I can.”

Laurynn’s commitment to saving could make a big difference for her future. The Federal Reserve reports that four out of 10 Americans have less than $400 in savings. Millions of Americans are living paycheck to paycheck due to volatile and low incomes, but there is hope.1 Our research shows that even small amounts of savings can help people build financial security and prepare for the unexpected. My experience leading SaverLife has shown me time and time again that the savings crisis is a solvable problem.

Fintechs provide advantages of speed, flexibility, and rapid experimentation. However, in order for these advantages to make an impact, the risks of security, data protection, and digital barriers must be addressed. Fintechs possess the technology to develop and distribute financial tools to the people who need them most—but only if the products are well designed, with a deep understanding of the target market and a clear commitment to advancing a more equitable financial system for all consumers.

Financial technology, or “fintech,” companies present a powerful opportunity to apply emerging technologies to deep-rooted financial inequalities. I see the clear potential for fintech to create inclusive products that boost savings every day at SaverLife. SaverLife is a nonprofit fintech with a mission to help families build emergency savings and long-term financial stability. I joined the team in part because I recognized that, as new tech-driven financial products and services emerged, low-income communities were at risk of being excluded from the benefits of technology.

When I think about how we can enact real financial change for our members, I think of women like Laurynn, a single mom and small business owner whose income and ability to save was decimated by the pandemic. But, she told us in October 2020, “I’ve still been saving when I can.”

Laurynn’s commitment to saving could make a big difference for her future. The Federal Reserve reports that four out of 10 Americans have less than $400 in savings. Millions of Americans are living paycheck to paycheck due to volatile and low incomes, but there is hope.1 Our research shows that even small amounts of savings can help people build financial security and prepare for the unexpected. My experience leading SaverLife has shown me time and time again that the savings crisis is a solvable problem.

Fintechs provide advantages of speed, flexibility, and rapid experimentation. However, in order for these advantages to make an impact, the risks of security, data protection, and digital barriers must be addressed. Fintechs possess the technology to develop and distribute financial tools to the people who need them most—but only if the products are well designed, with a deep understanding of the target market and a clear commitment to advancing a more equitable financial system for all consumers.