I have long believed almost all financial literacy or financial education is a waste of time.  Well intended, but very low impact.  The correlation between information delivered and behavior changed is small.

At Finovate, I was interested to see quite a few companies with “financial capabilities” offerings.  Our partners at CSFI are promoting a new approach to this old dog they call financial capability:  it’s more product centric, more contextual, just in time, and places equal burden on industry and consumer (not just industry) to be responsible for responsible products put to constructive use.

CFSI has a challenge grant out now for non-profits (which could partner with for-profits) who are reinventing the old paradigm.  Over $1m is at stake, so check it out.

For obvious reasons financial literacy usually remains in the non-profit domain.  However, when you start thinking the way CFSI is, there are quite a few for-profit opportunities.  Some more compelling than others.  At Finovate alone, I found a bunch:

• Kiboo will offer a debit card for young people and an online facilitated dialogue around budgeting etc with parents and content.  Unclear how they will get distribution.
• Bundle offers “socially informed money management” by comparing your situation in visually cool ways with a large data set of others’ financial vicissitudes.  Very cool, although I don’t understand the exact application.
• Thwakk was the boldest offering: a 3D video game in which your avatar must make a number of financial choices to avoid death-in-the-form-of-bankruptcy.  The game struck me as “designed” to be cool for kids, but not actually cool – yet a back-end tool lets bankers or parents customize, track and analyze performance.
• Lead Fusion offers a “guided selling” application for banks who want to make their product listing more dynamic, customized and educational.  Dry, but of clear value to banks and consumers.
• PageOnce, which claims to have 3 million registered users, is a mobile PFM which educates through alerts based on your actual accounts.  Clean, clear app, if limited in its pedagogy.
• Strands leads the endless PFM offerings in its goal setting and management, although it seemed like a cooler app than real-world tool.
• MatchFund was the coolest of the financial capabilities offerings, I thought:  a well designed, facebook-esque environment with financial challenges for teens that tie into real-world choices and real-world incentives.  Some game theory thrown in for good measure, I wish these guys well finding distribution.  I’m guessing they’re pursuing banks, which will prove fruitless and instead should advertise to parents on facebook.  My 2c.

Are any of these guys the panacea for financial education?  Unlikely, but might be a couple potentially viable business models here that will materially improve their users’ financial capability.