As community banks and credit unions start to think about potential fintech partnerships, they may want to consider how they can use fintech for a social good and possibly reach underserved segments of their market.

In remarks last week at the LendIt conference in New York City, Comptroller of the Currency Tom Curry said the OCC would not take a light touch with fintech applicants for bank charters, something the agency has said it will consider as part of its guiding principles on responsible innovation. And financial inclusion, he said, is a piece of that.

“We expect fintech applicants for national bank charters to include in their business plans a description of how they will support the needs of the communities they serve and promote financial inclusion as a federally chartered institution,” Curry said in prepared remarks.

But why should banks wait for fintechs to jump the gun on financial inclusion? Fintech partnerships could offer banks and credit unions another channel by which they might reach an untapped market. The nonprofit Center for Financial Services Innovation (CFSI) estimates that financially underserved Americans represent as much as $141 billion in missed opportunity. The organization based that figure off the amount that underserved consumers spent in 2015 on fees and interest to manage their financial lives.

Lifting the unbanked and underbanked into the mainstream financial system is the central goal of the CFSI. John Thompson, a senior vice president at the organization, said that community financial institutions first need to think about the set of outcomes they want to achieve when they start looking at fintech.

One desirable outcome might be encouraging better savings habits among customers or members. Thompson said his research revealed that one of the strongest predictors of financial health is an individual’s having saved ahead for large and irregular expenses.

But it’s not enough to just tell people they need to save more. Logically, this is something most people would like to do anyway, but aside from having the funds to set aside in the first place, there’s a step missing between information and action.

That’s how Timothy Flacke, executive director of Commonwealth, looks at it. Formerly the D2D Fund, Commonwealth develops solutions to help boost people’s financial security, often with the intent of making positive financial choices easy and fun. The organization recently developed an app called Savings Quest that offers a quick, impulsive way to move money into a savings account and rewards users with badges and animated dancing animals when they meet certain goals, Flacke said.

“It’s using elements of games, or gamification, to make things more interesting for people,” he said. “It’s much more engaging because it’s interactive and on this device that most of us are compulsively looking at several times an hour.”

Investors Sought

Different financial institutions approach the subject of fintech differently. Larger organizations, who have the benefit of scale, might launch their own fintech incubators. Digital Credit Union is one (local) example, and the credit union recently announced the latest cohort of seed-stage startups in its FinTech Innovation Center.

Several of the eight new startups receiving free work space and mentoring through DCU’s center are focused on saving, financial planning and paying down debt.

David Araujo, DCU’s vice president of technology, said in an email that the center’s call for applicants “specifically includes those companies who are developing products that can provide innovative solutions to help with the unbanked and underserved.”

Of course, it’s difficult for smaller financial institutions to implement new technologies at all, let alone get their arms around the threats and opportunities posed by fintech. For one thing, Thompson said, many smaller banks and credit unions may well be operating on old legacy systems that don’t integrate well with certain new apps. That’s where smaller banks and credit unions may want to think about potential backend applications of fintech.

“I suspect many [bankers] are wrestling with the complexity and cost and overhead of understanding and compliance with all the various federal and state regulations they need to deal with,” Thompson said. “In some ways, one can look beyond just having a consumer facing app and see value in helping to attack elements of the business that are either difficult or limiting.”

For those who are thinking about consumer-facing fintech, financial inclusion and well-being might be one worthy set of outcomes. And if you’re looking for a place to start, you might call Flacke.

Speaking about Savings Quest, he told Banker & Tradesman, “We are actively looking for financial institution partners who would like to implement this app.”