Financial Health at a Regulatory Crossroads: Why Standards Matter Now

The financial services sector stands at a pivotal moment where regulation, technology, and customer trust intersect.

At the recent Emerge Conference, new financial health standards were introduced to guide banks, fintechs, and policymakers. Importantly, these standards shift the focus from checking compliance boxes to supporting consumer well-being. In addition, they create a clear way to measure progress and identify gaps in the system. As a result, banks and regulators now share a more practical language to track financial health outcomes, rather than relying on vague ESG terms.

The shift is profound. Instead of relying on compliance-focused models, institutions are now encouraged to adopt outcomes-driven frameworks that directly assess customer financial health. To achieve this, they must rethink product design, while also using data analytics to monitor behavioral change. Moreover, embedding financial education into everyday tools helps customers make informed decisions. As a result, when incentives are realigned, financial institutions can ensure customers are not only served but also genuinely supported in reaching financial stability.

At its core, the debate is about trust. Misaligned incentives and predatory practices have eroded confidence in the financial system, creating a fragile environment where regulatory scrutiny is inevitable if self-regulation fails. By embracing these standards, institutions can rebuild trust, positioning themselves as both responsible businesses and customer advocates. The moral hazard question—whether banks profit from customer vulnerability—underscores why change is urgent.

The future of financial services depends on making financial health the default, not the exception. Industry leaders now face a choice: adopt the standards and proactively shape the regulatory landscape or risk losing control of the narrative to external forces. The standards provide a clear pathway for action, one that balances regulatory resilience, customer well-being, and long-term institutional credibility.

Meet the Experts

Jennifer Tescher – CEO of the Financial Health Network, a leading authority on measuring and improving consumer financial health. She brings decades of experience aligning financial services with customer well-being.
Brett King – Author, futurist, and co-host of Breaking Banks, known for his critical lens on financial inclusion, digital transformation, and trust in financial institutions.
Jason Henrichs – Host of Breaking Banks, fintech investor, and advocate for responsible innovation.

Their combined expertise ensures a robust perspective that blends regulatory insight, customer-first thinking, and industry foresight.

The Big Idea

The central theme is the urgent need to redefine success in financial services. Instead of evaluating performance by regulatory compliance or short-term profit, institutions must measure whether customers are truly financially healthier after engaging with them. This represents a paradigm shift—from compliance metrics to customer outcome metrics, anchored in transparency, equity, and shared accountability.

Key Takeaways

Financial health must be measurable. Institutions need clear KPIs tied to consumer outcomes, not just compliance checkmarks.
Trust is the new currency. Without addressing predatory practices and misaligned incentives, public trust will continue to erode.
Design with impact in mind. Product design should prioritize financial resilience and well-being, supported by analytics and behavioral insights.
Collaboration is critical. Policymakers, banks, fintechs, and advocacy groups must co-create a sustainable framework for financial health.
Action over rhetoric. Small, immediate changes, like transparent pricing and integrated coaching, can create measurable impact now.

Tools, Strategies, or Frameworks Mentioned

Financial Health Standards (Emerge Conference): A structured framework to benchmark institutional impact on consumer financial well-being.
Data-driven behavioral tracking: Using analytics to assess whether product use leads to better customer decisions.
Incentive alignment models: Ensuring compensation and leadership goals include customer financial health metrics.
Fintech partnerships: Leveraging innovation to scale personalized coaching and support.

Final Thoughts

As Jason Henrichs summarized:

“The future of financial services depends on our ability to make financial health the default, not the exception.”

The industry faces a clear choice: proactively adopt and integrate financial health standards into core operations or risk regulatory intervention and continued erosion of trust. The standards provide not just a benchmark, but a blueprint for how financial institutions can align profit with purpose in a way that strengthens both business resilience and societal well-being.