Making Sure Innovation Thrives

Center for NYC Neighborhoods
A boy carrying a moving box.

At the Center for NYC Neighborhoods, our innovation Underwriting for Good is all about helping people. It’s what we have in common with our fellow Breakthrough Challenge winners. To succeed, we are leveraging new technology to strengthen historically underserved communities and create access to credit where there was none before.

Our vision means finally supporting many different kinds of people, including people who have been outright damaged by conventional lending – including communities of color who have been purposefully charged higher rates for their credit; underbanked communities who don’t use traditional banking systems for their finances; households of color who were uniquely targeted by the predatory lending that led to the 2008 housing crash, and many others.

Working on something that has such game-changing potential is not easy, to say the least. Once you dig in and actually start working on turning an idea into a reality, real-world pressures and factors come into play – budgets, timetables and capacity limits.  
So how do you stay true to the spirit of an innovation as you get down into the details? What can we do to make sure the intentions of our innovation remain the same over the course of the project? And, most importantly, how can we ensure that our project does no harm, especially given the long history of exclusion and predatory lending for borrowers of color?

To make sure we stay true to our vision, we’ve found it’s critical to reflect on the very concept of innovation while we’re in the process.

Innovation is not stagnant: it must be iterative and responsive.

You don’t just innovate once; you innovate constantly, and at each turn you have to ask yourself if what you’re doing is the right and responsible choice. And innovation doesn’t have to mean in the tech space only. It can involve innovation in our work culture and practices.

Simultaneously, you cannot innovate just for the sake of it. If our ultimate goal is to help people, our vision must be balanced by asking, who is this helping? Are we continuing to help who we said we would? Are we reinventing the wheel for no reason? Are we keeping a homeowner or prospective homeowner of color at the center of all our thinking, problem-solving and innovating – and ensuring everything we do will work for them?

This is especially true because Underwriting for Good relies on cutting-edge fintech. Technology is by nature iterative and responsive but leveraging fintech also means trying to improve on solutions already offered, while avoiding the historical tendencies of fintech to uphold the status quo and literally encode unconscious biases.

To innovate responsibly, we return to these three ways to make sure we stay true to our innovation vision.

  1. Unpacking our Own Biases
    Because our innovation is targeted to underserved communities, we need to understand that as people, we are going into this work lives carrying our own implicit bias, because everybody does. Across races and ages, we all swim in biased waters that subtly and actively animate and inform our decisions. This is critical: we need to keep ourselves open to learning so we can move the work forward holistically but avoid self-recrimination and blame. We ask ourselves: if all of us must be better at this, how can we ourselves be better? What can we do, both on a personal level and on a societal level?

    With cutting-edge technology at hand, it would be easy to cut corners or let the process unroll at its own pace without much interrogation. Instead, it is absolutely critical to the vision of our innovation that we be aware of our biases and the biases of our field.

    Innovation is often perceived as being just about solving the big problem, but we cannot separate ourselves from the problem and the circumstances. Instead, we must approach innovation asking who we are, who are we helping, and what are we bringing to the table, so we can keep improving the product and ourselves.
  2. Learning Together – and from – Each Other
    Working on Underwriting for Good has brought teams from across our organization together and presented a unique opportunity for our staff to learn from each other. By pushing ourselves to become experts where we weren’t before, we can keep looking at our work with new eyes and keep testing our thinking and our vision.

    For example, web developers are now deepening their knowledge on lending, while our lending team is hearing new ideas from product managers and seeing new ways to translate ideas into something digital and achievable. By working across these siloes, we are continually and intentionally creating a bit of managed chaos and interruption of routines. That allows for questions, radical ideas and productive conversations that lead to innovations. Cross-team collaboration within the Center has highlighted the importance of learning and asking new questions from new angles to maintain that innovative spirit.
  3. Learning from the Field
    We have learned the critical importance of continually asking if what we’re trying to achieve has been done before and, if so, how. The concept behind Underwriting for Good – equitable lending to communities not previously served by traditional credit – is not new in the banking industry. Instead, it is our approach that is innovative. Our project combines two methodologies. They draw from our manual underwriting experiences, which address some of the impacts of the racially unequal history of lending, but not all, and combining them with fintech to automate and scale equitable lending. Just like we continually ask ourselves if our biases are impacting the project, we also must ask what the banking industry’s biases are, and how we can learn from our peers.

    No innovation occurs in a vacuum: the people behind the idea and the field they’re hoping to revolutionize are just as significant as the idea itself. We are always reminding ourselves to be open and receptive to what’s happening outside ourselves.

Ultimately, when it comes to staying true to the vision of our innovation, we keep returning to one particularly important question: where are we positioning ourselves relative to our innovation? This is key. Given that Underwriting for Good is meant to serve underserved communities, we do not want to enter the space and assert that we have all the right answers. Interventions for underserved communities have been done before with good intentions, but they often did not allow for true innovation that serves communities of color. Such armchair quarterbacking instead quickly reinforces the same power structures at every level, whether in the form of microaggressions or in the form of de facto housing segregation.

It is critical to the success of our project that we are respectful of the space we’re occupying. Indeed, tech can be as dangerous as it can be innovative, especially when it comes to communities of color (see, for example, the inadequacies of facial recognition software). We do not want to – and are determined not to – repeat those same mistakes, even as we know our intent is good.

With fintech’s history of prioritizing profits over people, we need to stay true to our vision that centers homeowners and prospective homeowners of color and make sure that it is equitable.