The Bank for International Settlements Financial Stability Institute has published an FSI Brief examining how digitalisation and innovation affect financial health. It finds that wider access to payments, credit, savings and insurance can improve households' ability to manage finances and absorb shocks, but that overall outcomes are mixed and, in some countries, financial health indicators have deteriorated despite greater use of digital services. The brief highlights three main vulnerabilities alongside the benefits: a global rise in scams and fraud, greater overindebtedness among some digital borrowers, and use of investment products that may be ill suited to retail consumers. The paper reviews benefits from fast payment systems, alternative-data and artificial intelligence-based credit assessment, digital savings tools, insurtech and AI-enabled fraud detection, while stressing that financial health should be measured with both objective and subjective indicators. Evidence cited includes fast payment system access in more than 135 jurisdictions and estimated global scam losses of USD 1 trillion. It says financial authorities should strengthen regulatory and supervisory frameworks, consumer protection, fraud liability and digital lending rules, monitor AI and digital engagement practices in retail investing, and build inclusive public digital infrastructure such as digital identity, fast payment systems and data-sharing frameworks to support responsible innovation.
Bank for International Settlements - Financial Stability Institute 2026-04-29
Bank for International Settlements Financial Stability Institute brief finds digital innovation can improve financial health but raises fraud debt and investment risks
The Bank for International Settlements Financial Stability Institute has published a brief on how digitalisation and innovation affect financial health, finding that while expanded access to payments, credit, savings and insurance can strengthen households’ resilience, outcomes are mixed and financial health has deteriorated in some countries despite wider digital use. It highlights rising scams and fraud, overindebtedness among some digital borrowers, and unsuitable retail investment products as key vulnerabilities, citing global scam losses of USD 1 trillion. It urges authorities to reinforce regulation, consumer protection, fraud liability and digital lending rules, monitor AI and digital engagement in retail investing, and build inclusive public digital infrastructure to support responsible innovation.