The Federal Reserve Board published a speech by Governor Michael S. Barr arguing that financial inclusion should be assessed by outcomes, not just access, and that banks are increasingly using transaction data, behavioral science and artificial intelligence to measure customers' financial health and design products around it. In remarks at the EMERGE Financial Health 2026 conference, Barr said these tools can help institutions identify whether customers are actually benefiting from products, support more tailored interventions, and improve services for financially vulnerable households, while still requiring strong consumer protection. Barr framed the issue around the gap between broad banking access and weaker financial outcomes, noting that about 96 percent of American adults have a bank account but only roughly 31 percent report feeling financially healthy. He pointed to the Federal Reserve's Survey of Consumer Finances and Survey of Household Economics and Decisionmaking as key foundations for measuring household financial wellbeing, including the recurring finding that 37 percent of households could not comfortably pay an unexpected USD 400 expense in full. He said firms already using financial health metrics report benefits such as better product testing, customer alerts before overdrafts, and improved monitoring of small-dollar loan outcomes through measures like savings buffers, overdraft incidence and credit scores. He also highlighted four main challenges to wider adoption: creating scalable measurement standards, balancing data access with privacy and consumer control, maintaining methodological rigor, and turning metrics into timely and actionable guidance. Barr said metrics alone are not enough and must be paired with products that meet lower-income households' needs, supported by collaboration among financial institutions, technology providers, nonprofits and independent evaluators.
Federal Reserve Board2026-05-20
Federal Reserve Board publishes Barr speech on using financial health metrics and AI with privacy and consumer protection safeguards
The Federal Reserve Board published a speech by Governor Michael S. Barr urging that financial inclusion be assessed by customer outcomes rather than access, and highlighting banks’ growing use of transaction data, behavioral science and artificial intelligence to measure and improve financial health. He cited Federal Reserve survey evidence of persistent financial vulnerability despite high account ownership, and noted both the benefits of financial health metrics and challenges around standardization, data privacy and methodological rigor.