A Deep Dive into the Data Driving Financial Health

Just wanna keep playing that music a little more.

So, good morning everybody. Good morning.

Thank you MX for inviting me.

Thank you for taking such good care of all of us.

Thanks for this awesome swag.

I'm up here representing, we all have been sitting

for a little while now.

That's tough to be that speaker

after you've been sitting for about an hour and a half.

So I'm gonna invite all of you to stand up for a minute,

shake it out, take a deep breath, stretch, do something,

get some blood flowing.

Okay? I invite you to sit back down.

I don't know about you,

but these days when I get up in the morning

and I turn on my phone

and look to see what's going on in the world,

it's frankly tempting to stay in bed

and hide under the covers.

I find the current state of the world overwhelming.

What impact will tariffs have on the economy?

Will the Fed lower interest rates this week?

Will AI make my job or my business obsolete?

Are my kids safe at school?

Will my house survive the next storm?

It can feel overwhelming professionally to figure out how

to move your business forward in the face

of such incredible uncertainty, but the challenges

and opportunities that lie before us require action now

because your customers are facing the same uncertainty,

their living paycheck to paycheck, working multiple jobs

because expenses have outpaced incomes

over the last 30 years.

They're caring for family members trying to figure out how

to make rent or cover the mortgage

and recovering from the latest flood or fire.

I'm not exaggerating about the weather either.

Between 2018

and 2023, 3 out of 4 people in the United States

experienced an extreme weather event.

As you heard Rodney Hood earlier, say,

narrow data points like household income

or a credit score miss the nuance of

what your customers are experiencing.

And it's why my organization developed the concept

of financial health, which reflects the ability

to make ends meet in the here and now, to absorb

and recover from financial shocks,

and to make progress toward long-term goals.

We developed it both to paint a picture, a holistic picture

of people's financial lives, and to enable banks

and credit unions to measure the outcomes that matter.

Financial services companies have an outsized role to play

in helping their customers navigate their financial lives.

We don't need to wait for a final 1033 rule

or a multimillion dollar investment,

or our company's next strategic planning process

to drive financial health outcomes for our customers.

We can start now by making relatively small,

thoughtful human-centered choices in our everyday work

because small actions, when taken with intention,

can have outsized impact.

Let me show you what I mean.

Every day in the United States, two people are killed

by drivers running red lights

and cities across the country have tried for decades

to bring that number down.

Many installed red light cameras at busy intersections

betting that the threat of a ticket would make us break.

Cameras flashed.

Tickets piled up, city coffers filled,

and yet crashes hardly fell.

And so engineers tried a different angle.

They shifted their attention away from the red light

and instead experimented with increasing the duration

of the yellow light, giving drivers more time to get

through the intersection before the light turned red.

It turned out that by letting the yellow light shine for

as little as one second longer

crashes were reduced by 40%.

Small change, big impact.

If traffic engineers could save more than 300 lives a year

with a simple one second adjustment,

imagine the impact you could have on the financial lives

of your customers by making small

but meaningful changes to your products

and your experiences.

What is the equivalent in your work of adding

one second to the yellow light?

Here's one. What if you gave your borrowers the power

to choose their own due dates

for their monthly loan payments?

It may sound obvious,

but most auto loan payments are due on the date

that the borrower drove the car off the lot.

Convenient for lenders, but stressful for borrowers.

Put yourself in your customer's shoes.

Let's say you purchased the car on the 12th,

but your paycheck doesn't arrive until the 15th.

And so every month, that three day gap creates anxiety.

Will I have enough money in my account to make payment?

Will I be hit with a late fee if I don't?

Will the bank repossess my car?

Beneficial Bank decided to flip the script

during the standard welcome call,

the bank texted new borrowers a simple form allowing them

to pick a loan payment date that aligned with their paydays.

A control group kept the old process

and the results were remarkable.

Borrowers who received the form

had 27% fewer late payments

and paid 10% more toward their loan.

While customers benefited from fewer late fees

and improved credit scores,

the bank saw fewer missed payments

and had fewer charge offs.

Small change, big impact.

We've collaborated with JD Power to identify the kinds

of financial health experiences

and tools that drive customer satisfaction.

And the data demonstrates a strong business case

satisfaction increases

by double digits when a customer uses just

one bank tool.

In fact, financially healthy customers experience the

biggest jump in satisfaction,

but these tools also drive meaningful,

improvements in satisfaction for those

who are financially challenged.

For instance, financially vulnerable customers

who use their bank's digital budgeting tool

to help manage their spending

experience a 34% increase in satisfaction while

reducing spending by as much as 24% per month.

Freeing up funds for saving or debt reduction

or other financial goals Small change,

big impact.

Imagine a future where every financial product is

intentionally designed to improve financial health.

The Financial Health Network has been working with scores

of banks and credit unions

and fintechs over the last 10 plus years,

including many of your companies,

to ensure consumer financial health is at the center

of every product design and delivery process.

It's been inspiring to see

so many firms adopt a financial health mindset.

And together we've made real progress.

But the moment we're in demands more

than individual success stories.

It demands that we harness our collective power

as an industry to build an economy that works for everyone.

And to do that, we need more than good intentions.

We need standards.

Standards have the power to drive systemic change

from building codes, to nutrition labels, to traffic lights.

Standards have revolutionized industries

by setting clear expectations

and incentives that shape behavior

in today's relaxed regulatory environment.

Aligning with financial health

standards is even more important for building trust,

strengthening customer relationships, enhancing brand value,

and improving long-term performance.

With standards in place,

financial health can truly become the norm.

A few months ago, my organization published our first set

of standards focused on designing checking accounts

and credit cards that help consumers spend well

developed with input from an advisory board of your peers.

These standards provide clear actionable guidelines

for designing the account features, policies,

onboarding, and accessibility practices that have been proven

to make a positive difference in people's financial lives

and to your bottom line.

For instance, one of the standards enables customers

to choose their monthly due date

for their credit card payment.

Just like Beneficial State Bank does for auto loans.

Another is focused on designing the most effective

digital budgeting tools.

I encourage you right now to take out your phones

and check out the standards for yourself.

You can download them

by scanning the QR code on the screen.

One of the things you'll notice is

that MX products enable several of the standards

balance forecasting, money labeling, budgeting tools,

recurring expense review.

When you have a moment, you can use the scorecard

that we provide in the report to assess

how your institution's products stack up.

Next month, we'll be publishing an assessment of

how the top 20 banks, credit unions,

and digital providers perform against these standards.

What I can tell you now is that banks

and credit unions have begun offering customers a growing

set of tools over the last few years

to help them more effectively manage their finances.

That's great, but the job's not done yet

because our research finds that nearly 4 in 10 households

own checking accounts at multiple institutions

and an even larger share

of households have disparate banking

and credit card relationships.

And so for the financial health tools you're building

to be truly useful

and value add, you've gotta enable your customers

to import all of their data from across institutions.

FHN has been a champion of Open Banking from the beginning

because if consumers are to have a fighting chance

of managing the growing complexity of their financial lives,

they have to be able to access all

of their data in one place.

Seeing yourselves not just as data furnishers,

but as data recipients will also help strengthen the Open

Banking ecosystem.

It'll improve the lives of your customers,

and I really believe that it will ultimately

rebound to your bottom line.

Ultimately, FHN's vision is

to build a comprehensive library of standards, not just

for checking accounts or credit cards,

but for every product that shapes a person's financial life.

The standards we released in June are just the first step,

and they're only as powerful

as the people who bring them to life.

That's all of you, and it's your voices

and your leadership that's needed right now.

If each of us can drive even one

or two small changes in the way we do business,

collectively, we will have a meaningful impact on

financial health in America.

Thanks very much.