CFPB Innovations Project: Call for Prototyping Partners
ideas42 and its partners, the Doorways to Dreams (D2D) Fund, the Center for Financial Services Innovation (CFSI), and the Corporation for Enterprise Development (CFED), are excited to announce a call for prototyping partners on the Innovations Project. We’re seeking innovators, businesses, and other organizations to work with us to prototype the innovations described below and evaluate their effectiveness.
The Innovations Project is being conducted by the Consumer Financial Protection Bureau (CFPB), with ideas42 serving as a CFPB contractor tasked with managing this project. The project seeks to develop and test new approaches that help consumers overcome common decision-making challenges in managing their finances.
We are looking for organizations interested in participating in the project to help prototype and test the innovations described below. Organizations should indicate their interest by submitting a brief letter of interest describing their interests and capabilities via email to firstname.lastname@example.org. Please include the term “Innovations Project” in the subject line. Please contact us today if you are interested in this opportunity – and make sure you submit your interest by November 8, 2013.
Types of Partners Sought
The types of partners in which we are interested have developed or have capabilities to develop one or more of the following innovations:
1) Organizing and Managing Finances: Many consumers face difficulties organizing and managing their finances, especially keeping their spending within their budget.
A personal financial management (PFM) software or hardware company or other entity with willingness to test new parameters that assist consumers in organizing and managing their finances, potentially including:
• Mechanisms on a debit or credit card to provide simple feedback on purchases’ impact on finances;
• Simple, automated personal budgeting features that adjusts to spending patterns; and/or
• Mechanisms to encourage consumers to re-evaluate spending decisions before and after purchases.
2) Managing Cash Flow and Bill Payments: Many consumers have incomes that vary from month to month, and bills that that arrive at varying times and frequencies month to month. As a result, consumers may struggle to manage their cash flow and pay their bills in a manner that prevents negative economic consequences, such as late fees, higher interest rates, or losing valuable assets such as their home or vehicle.
A financial institution or personal financial management (PFM) software or hardware company or other entity with willingness to prototype new online bill pay features that help consumers stay on top of the bills and recurring expenses that are most important to them, potentially including:
• Automated mediation between consumers and their billers around billing schedules and terms;
• Use of “pre-set” or opt-out payments to provide an alternative type of automatic payment for consumers who want to automate payments but are concerned about overdrafting;
• Developing a dashboard that encourages consumers to consciously manage their bills and compare consequences of different payment options; and/or
• Opportunities to use windfalls such as tax returns to “pre-pay” bills and get ahead on their finances.
3) Managing Finances at Retirement: At the time of retirement, some consumers do not utilize their personal retirement accounts in ways that maintain adequate funds to sustain their quality of life throughout their retirement years.
An employer or other entity willing to provide new tools and materials to employees approaching retirement to enable them to make the best decisions for them with their retirement savings and finances, potentially including:
• Forms that enable employees approaching retirement to pre-commit to options that serve them better;
• Simplified summaries, presentation of choices, and visualizations of the impact of decisions made at time of retirement; and/or
• More support around the decision process to keep employees from unnecessarily cashing out.
Entities interested in this partnership opportunity who meet the following criteria and are selected by the CFPB will work with ideas42, a CFPB contractor tasked with managing this project.
Criteria for Partners
Baseline criteria for partners will be as follows. Organizations seeking to partner with the CFPB and ideas42 in prototype development and testing of innovation designs must have demonstrated the following characteristics:
1. Fit with the project in mission and commitment to innovation. The project’s mission is to create innovative strategies to address some major financial challenges consumers face today. This mission could create a tension with some organizations’ mission, business models or interests. Therefore, an organization’s fit with the project in mission and commitment to innovation is crucial. Partners who are aligned in mission and commitment to the project exhibit the following characteristics:
• Organizational fit – An interest in alleviating the decision-making challenge the innovation seeks to address, as described above;
• Organizational priority – An interest in working quickly and flexibly in developing and testing the innovation in alignment with the project’s goals and deadlines;
• Management buy in – A commitment, on the part of the organization’s management team, to the project and its core objectives, including evaluation and scaling of results; and
• Management capacity – Ability, on the part of the management team, to approve and dedicate resources to the project.
2. Flexibility and capacity to do rapid prototyping and refining of the innovation design. ideas42 will work with selected partners to begin rapid prototyping and to refine and test the proposed innovations so that the innovation designs fit the goals of the design and the innovation context. ideas42 will consider partners that are well-positioned to prototype and refine the design proposed in the partnership when they have:
• Flexibility in and/or experience with prototyping and rapid iterations and testing of design elements;
• A clear understanding of the decision-making challenge the intervention seeks to address;
• Knowledge of or experience with consumers’ struggles with the specific decision-making challenge the intervention seeks to address; and
• Experience in working to address the targeted consumer’s specific financial situation.
3. Ability to create and iterate prototypes of the design in accordance with the goals of the project. As the goal of working with partners at this stage of the project is to successfully field test models of the intervention designed by ideas42, the partners must be able to create the prototypes. Because prototyping is an iterative process, requiring a great deal of back and forth between ideas42 and the partners, partners must be nimble enough to be able to respond to changes. Qualities that indicate a potential partner’s ability to implement a prototype are:
• Ability, through the products and/or services they offer, to exert an enduring and measurable influence on consumers’ decision-making process;
• Flexibility to respond to modifications in elements and delivery of the intervention as specified by ideas42 and CFPB; and
• Ability to deliver intervention to consumers at timely, key-decision-making moments.
4. Ability to collect data and achieve a level of scale. A major goal of the project is to create innovative solutions that can help a substantial population of consumers overcome financial challenges. Therefore, organizations must also have sufficient scale to reach a meaningful pool of the affected consumers. In addition, to understand the effectiveness and usability of the innovations, organizations must be willing and able to collect data about the innovation. Qualities that indicate a potential partner’s ability to collect data and reach consumers are:
• Sufficient scale to run a successful pilot, with a preference for greater scalability;
• A proven capacity to collect data in a systematic and consistent manner; and
• Willingness to agree to sharing organizational data and a rigorous evaluation plan that can help advance the knowledge base for what works to improve financial behaviors.
5. Ability to pass due diligence reviews as required by the CFPB. In addition to looking at criteria directly related to the refinement and implementation of the prototype design, ideas42 and the CFPB will conduct a preliminary review evaluating the suitability of the organization as a potential partner to ideas42 and the CFPB, to ensure that the potential partner:
• Has not engaged in illegal or improper dealings;
• Has necessary financial documents available for review; and
• Is not currently under investigation or the subject of an enforcement action by the CFPB or other federal regulators.
Additional due diligence may be required.
6. Additional Requirements. Organizations that apply must agree to abide by the following conditions:
• Agreed to the rules of the collaboration
• Incorporated or maintain a primary place of business in the U.S.
• Not a federal entity or acting within scope of existing federal contracts
• Can participate in required timeframe
• Assume risks & waive claims against government/contractors
• Has demonstrated insurance/financial responsibility
• Willingness to test prototypes with a minimum of 100 consumers
• Willingness to participate in a more rigorous evaluation of consumer outcomes for prototypes that are successful. This may include a randomized controlled trial with a larger number of consumers.
• Is willing to agree to intellectual property requirements regarding the innovation. Intellectual property rights will be negotiated with each partner and may depend on the specifics of the innovation under discussion; however, in general, the CFPB will retain the right to share the features of the approach and the research results widely with the public.