On May 20, Fed Governor Michael Barr delivered remarks on measuring and improving consumer financial health. Barr noted that while approximately 96 percent of American adults now have a bank account, only roughly 31 percent report feeling “financially healthy,” and emphasized that financial access alone does not guarantee positive outcomes. He highlighted advances in data collection, AI, and behavioral science that are enabling financial institutions to move beyond self-reported perceptions toward more “granular, quantifiable, and actionable” financial health metrics — such as tracking savings buffers, overdraft trends, and credit scores — to design products that better serve consumers, and identifying whether consumers are actually benefiting from their use. Barr noted that the firms that were most advanced in adopting these measures reported promising benefits for both consumers and firms themselves, including reduced overdrafts, positive credit score trends, and operational efficiencies, suggesting that improving customer financial health can also support profitability.

Barr identified four key challenges to scaling financial health metrics: (i) identifying the most promising variables and measuring them reliably; (ii) balancing data access with consumer privacy; (iii) maintaining methodological rigor so assessments are comparable over time; and (iv) helping consumers translate metrics into actionable steps to satisfy concrete financial goals. He stressed that consumer protection remains a focus of the Fed’s mission, noting that strong protections help prevent deceptive practices, hidden fees, and predatory lending that can undermine personal financial stability. Barr called for collaboration among financial institutions, technology providers, nonprofits, and independent evaluators, stating that “the question is not whether to embrace these tools, but how to ensure they deliver on their promise.”