Faculty & Research
Encouraging savings for low-income America
Academia and social enterprise join forces to help low-income Americans save, designing innovative financial products that are grounded in world-class research.
Financial innovation has helped speed the global economy into ever-increasing wealth, but we know that this wealth has become increasingly unevenly distributed. In the late 1990s, Peter Tufano, now Dean of Saïd Business School, started to question why financial innovation only seemed to be aimed at the wealthy: surely new products and mechanisms could be harnessed to benefit people in poverty? At the same time there was a growth of more socially-minded businesses that put people before profits and aimed to reduce social ills at the same time as running a successful enterprise.
Tufano founded Doorways to Dreams (D2D) to capture this newly emerging space: a sustainable business aimed at improving the lives of low income individuals. Fast forward to today, and the social enterprise has gone from strength to strength, and can now boast that it has changed the savings landscape of the United States of America, and to have impacted on tens of thousands of individuals.
In December 2014, President Obama signed the American Savings Promotion Act (ASPA) into law. In doing so he removed US federal prohibitions on banks offering Prize Linked Savings (PLS) products. These are savings vehicles where the collective interest of savers is redistributed via a raffle-like draw – similar to National Premium Bonds in the UK. The Federal bill grew out of pilot testing and research conducted over the last eight years by Tufano and D2D.
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|Professor Peter Tufano, Peter Moores Dean and Professor of Finance|
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