Positive Default Banking
This project also has a Changeshop where you can read more about its latest progress.
Go to Changeshop: Positive Default Banking.
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Sobre ti
Sobre ti
Nombre
Pete
Apellido
Mackenzie
URL en Twitter
URL en Facebook
Sobre tu organización
Nombre de la organización
Sitio web de la organización
País de la organización
Canadá, BC
Country where this solution is creating social impact
Canadá, BC
Region in BC where your solution creates social impact
Thompson Okanagan.
Tu organización es
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¿Cuánto tiempo ha estado operando la organización?
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La información que brindes aquí será usada para llenar las partes de tu perfil que hayan sido dejadas en blanco, como intereses, organización, y sitio web. Ninguna información de contacto será hecha pública. Por favor desmarca esta casilla si no deseas que esto suceda..
Innovación
Selecciona la fase que describa mejor el momento en el que se encuentra tu emprendimiento
Idea (estás listo para lanzarla)
¿Cuánto tiempo se lleva poniendo en práctica tu iniciativa?
Sigue en fase conceptual, pero se espera que se lance pronto.
The Need: Describe the need for your solution and the size and characteristics of the community(ies) your solution is engaging
Many individuals have difficulty saving for important goals and rack up significant levels of consumer debt because they do not have good budgeting skills. Default banking is an idea that is a simple concept - individuals can set up simple positive financial defaults in a visual way that encourage saving for things like education, retirement, major future expenses and paying off debt. Allowing individuals to make positive choices ahead of time greatly lessens their capacity for catastrophic short-term financial decision-making. The primary target group for this project is first-time wage earners and young families; however the concept is more broadly applicable.
La solución: ¿Cuál es tu solución? Sé específico.
The solution is a simple concept: a single bank account (per client or per family) that allows the user to access via internet a visiual representation of their money.
The account is subdivided into folders - virtual cookie jars - earmarked by the user for specific uses, a "Main" folder, "education", "clothing", "vacation", "credit card repayment", "retirement", etc.
Each deposit automatically subdivides into the folders. A folder can have a cap (e.g. "Clothing": $200) so once a target is achieved, money flows to the folder of highest priority. The user predetermines how much flows into each folder and the formula can be altered once per month.
When purchases are made via debit card, money flows out of the "Main" folder. If the Main folder is depleted, access to the account is either restricted or money comes out of folders in order of reverse priority.
The program could be enhanced by a 2-week financial literacy workshop for willing pre-screened participants.
The Model: Walk us through a specific example of how your solution makes a difference; include the primary activities involved in your solution.
A significant percentage of people will spend whatever money is available to them unless they effectively cap their spending. Allowing an individual to pre-restrict their own ability to spend encourages more intelligent financial choices. And by giving individuals control over the positive defaults they set, they become the primary architect of their own financial future.
Users set financial targets for each folder - e.g. Clothing: $500; Education: $10,000; Vacation: $1000. Once a goal is met, the individual can purchase without feeling guilty or nervous about sacrificing other goals.
The system helps eliminate financial excuses for lack of action or advancement in an individual's life. It also gives them a powerful tool to evalutate their decision-making process, whether their life goals are realistic given their current financial means and insight into what life changes may need to be made in order for those goals to become more realistic.
The Marketplace: Who are your peers and competitors? Identify others working to address the same needs as you and indicate what sets you apart from them.
Banks and credit unions are my primary "competitors", but they are also potential allies. The idea is so simple, and the basic technology exists, that I am unsure why it has not already been implemented. Banks potentially lose out on account transfer fees by allowing the user unrestricted manipulation of funds, but they could still charge a similar level of interest. Furthermore, banks could charge a higher monthly fee for access to this type of account.
This model could be set up within the existing banking system or a not-for-profit organization could adopt it, and set up a quasi-banking entity, that uses interest and/or monthly fees to offset the cost of product development and administration expenses.
Impacto social
Historia de la fundación: Queremos saber acerca del momento en el que hiciste "¡Ajá!". Comparte la historia de dónde y cuándo el/los fundador(es) vio (vieron) el potencial de esta solución para cambiar el mundo.
There were several "Aha!" moments in the development of the Default Banking idea. First was learning of powerful simple financial tools such as Muhammad Yunus' "Grameen Bank" and the profound impact that it makes on the lives of people in developing countries.
The second "Aha!" moment was when we personally discovered that we are much more efficient in my spending when we are constrained and know how much we have - when we are given $100 to spend in a grocery store, we make more intelligent spending decisions.
Third, regardless of the actual dollar amount avaiable, unless we have money set aside and earmarked for another purpose, we will eventually spend whatever is available to us.
Fourth, some of us do not work well with spreadsheets. We enjoy a tactile experience with money, much like cash into different cookie jars, but doing so virtually eliminates many practical challenges of doing so.
Por favor, describe el objetivo de tu iniciativa: un resumen de lo que están tratando de lograr
We expect 80% of people who use Default Banking (and take a short-term financial management workshop) to pay off consumer debt in 1-5 years. It allows them to set aside money for major predictible expenses - seize upon educational or career opportunities, more easily manage health-related, job-related or financial disruptions with a much smaller chance of having to declare bankruptcy.
Finally, if you own a house, your hot water heater will predictibly need replacing every 10-15 years; similarly, your car will eventually need replacing. A small amount of money could be set aside from each paycheque like "insurance", so that when the predictible happens, you don't need to dip into your kid's education fund to pay for it.
¿Cuál ha sido el impacto de la solución hasta la fecha?
None. We have not tried the idea because we are afraid to walk around downtown Kelowna with $2000 of cash in our pockets. We also don't like it lying around the house in mason jars, it's a security thing. If we did, however, we would have a much greater degree of financial peace in our lives.
My grocer told me the other day that he has a few "old timers" who don't trust banks and regularly cash their cheques and carry a roll of cash with them everywhere they go. He asks them about it and they say it has it's hazards, but in their entire lives they've never been in debt. Once the money is gone, it's gone until the next payday. And when funds are running low, they immediately know it, because their wad of cash is visibly smaller, and they change their spending habits until they have more money again.
My grocer recently found a roll of $2000 cash sitting at a till, and not for the first time. Fortunately he knew who the money belonged to. The rest of us may not be so lucky.
Cuál es tu impacto proyectado para los próximos 5 años?
Of the users that fully engage with the tool and a sound financial management goals, we expect to see 80% of them get themselves out of debt and on solid financial footing. With successful marketing, we forsee this idea creating a "race for the top", where other banks, not-for-profits and financial institutions have to create similar, perhaps better, tools in order to compete. Accordingly, access to the idea becomes more accepted and spreads to a wider range of the BC/national population.
Las iniciativas ganadoras presentan un plan fuerte de cómo van a alcanzar y realizar un seguimiento del crecimiento. Identifica tus metas a seis meses para el crecimiento de tu impacto
Identifica tres grandes tareas que tendrás que completar para llegar a las metas de seis meses.
Tarea 1
Explore not-for-profit or financial institutions potentially willing to house the project.
Tarea 2
Explore a team of IT Engineers to develop the software for the project.
Tarea 3
Explore curriculum developers to design a short-term financial course and screening system for new applicants.
¡Ahora piensa en grande! Identifica tu meta de impacto a 12 meses.
Identifica tres grandes tareas que tendrás que completar para llegar a tu meta de impacto a 12 meses
Tarea 1
Arrange an agreement with a not-for-profit or financial institution to house the project and develop cost estimate.
Tarea 2
Commission an IT team to develop the software and integrate it with the existing institutions on-line framework.
Tarea 3
Commission Curriculum Developers, build marketing plan to arrange first intake and develop follow-up statistics.
Sostenibilidad
Cuéntanos sobre tus alianzas.
The goal is to shop the idea around to different not-for-profits, banks and credit unions.
Are you currently targeting other specific populations, locations, or markets for your solution? If so, where and why?
Positive default banking is a concept open to everyone, but it is targeted primarily at first time employees and middle-class families. It is also targeted at population groups that don't have extensive financial knowledge or comfort with spreadsheet programs.
¿Qué tipo de sistema operativo y factores internos de la organización hacen que tu innovación sea un éxito?
Por favor, pon en claro las necesidades u ofertas que hayas mencionado anteriormente y/o sugiere categorías de apoyo que no están especificadas en la lista
 | 46 weeks ago Amanda Armstrong said: Thanks for the reply Pete and you're very welcome. Sounds very interesting. Good luck with everything! about this Competition Entry. - leer más > |
| 47 weeks ago Pete Mackenzie updated this Competition Entry. |
| 47 weeks ago Pete Mackenzie said: Hi Amanda, Thanks for your comments. At this point, my research has been informal, individuals who the product would target (or who are ... about this Competition Entry. - leer más > |
| 47 weeks ago Amanda Armstrong said: I really like this idea...have you done any research? Have you spoken with a bank about this idea? What if this was a smartphone app ... about this Competition Entry. - leer más > |
| 49 weeks ago Pete Mackenzie updated this Competition Entry. |
| 49 weeks ago Pete Mackenzie updated this Competition Entry. |
| 50 weeks ago Pete Mackenzie updated this Competition Entry. |
| 51 weeks ago Pete Mackenzie updated this Competition Entry. |
| 51 weeks ago Pete Mackenzie updated this Competition Entry. |
| 51 weeks ago Pete Mackenzie submitted this idea. |