Filene Research Institute is launching a financial incubator toserve the financially underserved thanks to a $700,000 grantfrom the Ford Foundation.

The 30-month grant, the largest ever received by Filene, willenable the institute to test, package and scale innovative, viablefinancial products that benefit low- and moderate-income U.S.consumers.

“This grant enables Filene to launch an accessible financialservices incubator to test products that counter the alternativefinancial sector practices detrimental to the wallets of America'shard working households,” said Mark Meyer, CEO of Filene.

“It leverages credit unions' historical role as a proving groundfor consumer-centric innovative financial products to testviability and adoption,” he said.

Filene will select 25 U.S. credit unions and five products foran 18-month pilot, scheduled to begin in November. Credit unionsinterested in testing potential incubator products andorganizations with potential product innovations may apply toparticipate in the program through the organization's website atwww.filene.org.

“The goal is to test five consumer-centric financial innovativeproducts in 25 credit unions, reaching a total of at least 5,000U.S. consumers in the testing phase,” said Meyer. “We'll advancethe most promising concepts with the end result of large-scaleimplementation and commercialization of at least one of the fiveproducts.”

Filene will test, package and deliver viable financial productsthrough the incubator's three discrete phases:

• The lab – testing promising product ideas
• The factory – manufacturing innovations and packaging productsfor mass adoption
• The marketplace – distributing products through in-person andopen-source online marketing

The incubator will use credit unions as the proving ground forthe developed products to test their viability with mainstreamfinancial institutions.

An advisory panel of financial institution staff, researchersand industry analysts will ensure the viability of the selection,testing and marketing of the incubator's product ideas, Meyersaid.

“A critical piece of innovation is execution,” said Meyer. “Thegrant brings resources and focus to prototyping, testing, learningand scaling financial innovations for the marketplace. It alsogives Filene the resources to fortify an innovation process thatdrives meaningful change beyond this grant.”

The grant comes as one in five households, or 24 millionAmerican homes, are underbanked and lack access to affordablefinancial services. The socioeconomic disparity is compounded bythe racial and ethnic disparities among persons denied credit.Currently, 53% of African-Americans, 44% of Native Americans and43% of Hispanics are underbanked.

The grant, three times larger than next largest grant Filene hasever received, will enable the organization to hire a director ofinnovation labs to lead the incubator.