September 29, 2025 • 57 mins
With so many people struggling to manage their finances effectively, the financial services industry is steadily shifting its focus from increasing financial inclusion to improving financial health. For more than two decades, Jennifer Tescher has been pursuing this cause with the Financial Health Network, with the aim of ensuring a fair shake for the “little guy.” Now, with the emergence of agentic AI and open banking, Jennifer is helping to usher in a new era of personalised financial solutions, from AI-powered advisers that improve financial decision-making, to “self-driving wallets” that can take action on behalf of consumers. In this episode, Jennifer explains what consumers stand to gain from these advances, how banks will benefit too, and how the work being done now is laying the foundation for a more equitable financial future.
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Episode Transcript
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(00:00):
It's going to sound a little crazy to say this, but I'm not a
big believer in financial literacy.
I'm much more interested in sortof real time news you can use to
help people make good decisions.That next generation of
technology is going to create enormous opportunities to help
people really improve their financial health.
(00:21):
Our research shows that financially healthy customers
are better customers. They're stickier if they're more
loyal, they are open to using more products from that same
institution. Jennifer Fisher, the founder and
CEO of the Financial Health Network.
I'll be speaking to Jennifer about the financial industry's
growing focus on people's financial health, why it
(00:43):
matters, and how new technologies are presenting
incredible opportunities to transform the way people manage
their finances. The more you can try to improve
the financial health of your customer, you're essentially I'm
building a better book of business.
Hello and welcome to another episode of Money Travels
(01:06):
presented by Visa, where we explore the extraordinary
innovations in digital finance, transforming lives and
livelihoods everywhere. I'm rich and it's only me.
Today you voted and you have your favorite host.
Now, unfortunately, Max is is onvacation.
Jennifer, welcome to the show. Thanks Rich for having me.
(01:27):
So I don't know if you know this, but at the end of each
episode, we ask people for like,recommendations of people that
they'd like to see on the show. And you were recommended and we
extended the invite to you from JP Nichols, who was our first
ever guest on the show. Oh, that's so kind of JP.
He he's, he's a great guy and and he and his team do really
(01:50):
important work. Amazing.
So listen, he'll be he'll be listening to the show and no
doubt provided me feedback on things I should have asked you
that he wouldn't hear about. But so listen, let's get into
it. I the first question I have for
you is just the, the, the words financial health, because we
talk and we've talked on the show to people around financial
(02:11):
well-being, financial literacy, financial inclusion.
Maybe you can just unpack those those two words for us.
Absolutely. 21 years ago, when Ifounded the organization, it was
actually called something different.
It was called the Center for Financial Services Innovation.
CFSI try saying that 10 times fast.
I can tell you if you can't do it.
(02:31):
And that's one of the many reasons why we ultimately
changed the name. But the real reason we changed
it is we started out focused very much on access and
inclusion to financial services.And then over the course of our
first ten years, several things happened.
The iPhone was invented, a big part of access solved.
(02:52):
We had a financial crisis. Wow, maybe those bank accounts
weren't such a good idea for people.
And then we had a Great Recession.
Wow. This isn't just a poor person's
problem. This is the majority of
Americans are who are strugglingfinancially and we missed it.
So. So what does that actually mean
for the average American? So when we measure financial
(03:14):
health, we think about people's ability to spend, save, borrow
and plan. Those are things we all need to
do and it's really not rocket science.
Can you pay your bills on time? Can you or do you?
Do you bring in more money than you spend in a given month?
(03:35):
Do you have enough short term savings?
Do you have enough long term savings?
Do you have too much debt? Do you have a good credit score?
Do you have sufficient insurance?
And do you plan ahead? That's how we really measure in
(03:55):
a more granular way. And so, you know, for someone
who's financially challenged, they're struggling to make ends
meet. They don't have enough money at
the end of the month. They're having to choose between
bills. There is no savings.
And when there is no short term savings, it's very hard to think
(04:15):
about long term savings and retirement.
They, they may have too much debt, they may have no debt
because they can't get any debt.They can't get any loans in the
1st place. But they probably don't have
very good credit score because they've they've ruined their
credit at some point by taking on too much debt that they can't
pay. They're not able to plan ahead
(04:38):
because they can't think about today.
And they probably just don't have enough protection in the
form of insurance. And, you know, unfortunately,
that's the reality for about 17%of Americans.
It's not unusual to be in that boat in a country like this.
(05:01):
And so it was in that moment that we realized that we weren't
in this just for access. We were in this to help improve
people's financial lives. And in order to improve people's
financial lives, you really haveto, as a provider, think about
the outcome, not just think about giving them a widget.
You've got to think about what'sthe outcome that people actually
(05:21):
want. And we believe that's financial
health. And we've spent the last 12 plus
years defining it, creating a framework and a measurement
methodology around it. And so we defined financial
health as having a day-to-day system that enables you to build
resilience and thrive. We think that financial health
is measurable, kind of like going to the doctor and having
(05:45):
your blood pressure taken. We believe that it's holistic.
It's not just one piece of data like your credit score.
It's got to look at the totalityof your financial life.
And we believe it's changeable and we have data that
demonstrates that. So that's how we think about
financial health. And of course, this isn't just
(06:08):
people in the financial servicesindustry who who care about
this. I think there's been a an
interesting collaboration with some royalty I've heard that
you've kind of worked on with this.
There is I get to, I get to say that I know a queen, Queen
Maxima, Her Majesty Queen Maximaof the Netherlands, who's
(06:28):
actually Argentinian by birth. She married into the family.
She for 15 years has been the United Nations Secretary
General's special advocate for, at the time, inclusive finance.
Think about financial inclusion.She really was like the
(06:50):
financial inclusion champion globally.
And over the last, say, 5 to 8 years, there's been dramatic
progress around the world as it relates to inclusion.
And so that movement started to think about, well, what next?
(07:10):
And so they looked to us becausewe had already made that shift
from access to outcomes. And we work very closely with
the Queen and her team. And I'm excited to say that last
year, at her 15th anniversary inthis role at the United Nations,
she actually changed the name ofher title from Inclusive Finance
(07:35):
to Financial Health. I thought you were going to say
the name of her actual kind of regal title for a minute, but I
guess it just, it just shows just how important the work that
is being done is to everybody and kind of it expands, it
expands generations, expands classes, expands countries.
Let's go back a few years to theadvent of open banking and, and
(07:58):
now kind of AI. How are these emerging kind of
digital capabilities changing what you were doing in the world
of financial health? I think they represent the next
generation of opportunity. So when I burst the centre, it
was really the advent of the Internet, the commercial
(08:20):
Internet that we could all use that helped me to realize that
all of a sudden we were going tobe able to reach and serve
people at a much lower price andto reach them where they were
at. In a way we had.
That was really what fueled us. And I think now, 20 years later,
(08:40):
that next generation of technology is going to create
enormous opportunities to help people really improve their
financial health. And I agree with you, it's the
combination of open banking or data and AI, because what is AI?
It's data and compute, but really it's the data, and open
(09:04):
banking is critical to help provide that data.
Can you just expand on that frompeople in the audience?
What is it about the data that'sso interesting and so impactful?
So the way I see it, Nirvana is serving a customer of one,
(09:24):
right? Extreme personalization down to
the individual, because certainly people have patterns,
financial patterns and that thatmay look like someone else's,
but at the end of the day, moneyis extremely emotional and there
are a range of factors in one's life that have an impact on it
(09:45):
at any given moment. And so being able to personalize
the advice and guidance to the human and to the moment in time
is extremely powerful. But in order to do that, you've
got to really understand the person's full financial picture.
(10:07):
So not just what they might havein their checking account or
credit card at one institution, but like what do they have in
their retirement account, if they have one?
Are they receiving any government benefits?
Those could be a significant factor in their income.
And if you're going to be tryingto make them alone using cash
(10:29):
flow underwriting, but the data you're looking at doesn't
include a really important component of their income, makes
them less likely to qualify for that loan, as an example.
So, you know, America, for better or for worse, provides
enormous choice. Overall, I'm a big fan of
(10:49):
choice. Choice is good, but it also adds
complexity. So people's financial lives,
even people who may not make a lot of money, especially people
who may not make a lot of money,their financial lives are really
complex. And having a computer brain like
an AI help people do the hard stuff.
(11:10):
But leaving the human in controlI think could be really
powerful. And how closely linked you, you
know, is that kind of financial literacy topic to financial
health, are we talking about kind of the same thing or is it
or is it slightly different? It's going to sound a little
crazy to say this, but I'm not abig believer in financial
literacy. I mean, of course I'm a
(11:31):
believer. We should all know more.
But what we know and what we do are often very different things.
So like, I know that I really shouldn't eat that doughnut, so
I cut it in half and then I go back later and just eat the
other half. That's that's me.
(11:52):
We all know we should save. This is not like something we
need to teach people. Everyone knows it would be
helpful to have a little money set aside.
It's hard to do. Even if you have a lot of money,
it can be hard to do for all kinds of reasons.
And so knowing and doing are different now.
I think it's really important that people know how to ask good
(12:15):
questions and how to be a smart consumer of all kinds of
products and services, includingfinancial products and services.
But like, I have two master's degrees.
I don't understand my mortgage documents.
I hire a lawyer for that purpose.
(12:36):
So I I think for kids it's vitalbecause that's more about
understanding how the world of finance works in general.
Adults don't tend to learn that way.
They learn in the moment. And so we talk about just in
time, information providers giving folks information, tips,
(13:00):
guidance at the moment they needit.
Like someone's in line at the grocery store, they put their
card in, they could get a text right then and there from their
bank saying this is going to overdraft your account, do you
still want to do it? That would be much more useful
to somebody than sending them a slip in the mail, literally in
(13:23):
the mail, or an e-mail a few days later saying, oh, you
overdrafted your account. So I'm much more interested in
sort of real time news you can use to help people make good
decisions. Yeah, I think I need that
message when I'm going up to thefirst half of the doughnut, let
alone the second-half of the doughnut.
Right, exactly. You know the scales telling me,
(13:45):
you know a couple of days later.I need the phone not just to
like buzz. I need the phone to like, shock
me, right? Hey, don't need that.
Is the work you're doing mainly centred around consumers or does
it also include kind of businesses, small businesses,
business owners, etcetera? Yeah.
(14:06):
So most of our work has been focused on consumers.
We have over the years done somebit some work focused on the
financial health of small businesses.
We've actually developed a framework and way to measure the
financial health of small businesses as well.
I think there it's really recognizing the connection
(14:29):
between the financial health of the business and the financial
health of the business owner whois also a consumer.
And for a lot of small businesses, it's a sole
proprietor. It's it their business and their
life are the same thing, really.But banks aren't organized that
(14:49):
way, right? Your small business over here
and your consumer over here, andnever the twain shall meet.
And that's frankly where banks and others fall down on small
business. It's one of the places because
if the financial health of the business owner isn't good,
they're not going to get the loan because they're going to
have to cosign for it anyway, right?
(15:10):
And maybe the decisions they're making about the business are
actually harming their own personal financial health,
right? Think about all of the risk that
small business owners take on intheir own personal lives to make
their dream come true with theirbusiness.
So those things are really linked and they're super
important to address together. So just wanted to pick up
something that you said about, Iguess AI and obviously what's
(15:32):
the early days of these kind of self driving wallets and using
the Gentek AI to kind of take action on people's people's
behalf, which is is scary. And for a lot of people kind of
listening, that sounds like something you'd see in a, you
know, TV documentary or something in sci-fi.
What does it take to bring this to life?
(15:54):
Let me say first that I am just as scared as the next person
about the risks that AI represents and I don't take them
lightly. And in order to enable A and AI
(16:17):
to be your financial copilot or your agent, there is a lot of
work and a lot of steps between here and there before I would
feel comfortable. I don't think we're there yet.
There's a reason why the, the, the most highly regulated
institutions aren't no, one of none of them are putting an AI
(16:41):
in front of a customer because even the closest they get is
their chat bot and that's a rules based tool.
So the risk is extraordinarily low there.
So I just want to say that very clearly to start.
How is it that you you go about kind of mitigating those risks?
(17:02):
Yeah. Well, I think one of the risks
that I'm most concerned about isbias, because the fact is, AI is
only as good as the people who train it and the data that's
used. So it's really important to make
sure that we're using data that's representative of all
(17:25):
consumers, not just people who make a lot of money or who are
extremely financially healthy, because that's not going to be
helpful. And and also we need to make
sure that it includes all kinds of data sources.
So if you're someone who gets food assistance that could, that
could account for 20% of your income ultimately.
(17:48):
And if that's not that data isn't in the in the mix, you're
missing an important piece of that person's bigger financial
story. So I think one set of risks
around bias and representativeness is really
around the data. But I also think that it's
(18:12):
really important that we're not training a these AI tools to be
providing financial advice in the way we do it just for
wealthy people, because it doesn't necessarily translate,
you know, making decisions abouthow to invest your money or when
(18:35):
to pull down Social Security andthinking about tax implications.
Those are important and and AI can will be great for that.
But that's a very different set of intelligence and decision
making than the average person needs.
I think that's really important.I think there are some decisions
(18:58):
that we make all the time that if we could have a computer,
like set it and forget it, do the same thing over and over for
us, we would do that because it's just easier and more
efficient. So think about an AI that would
(19:21):
take the money you have leftoverin your checking account every
night, sweep it into a high yield savings account and then
bring it back every day just andyou could even set some
parameters. Don't do that if right like
that. I think we have to start small.
(19:42):
I don't think this is a here's my life.
Go run it. I think.
And I also think that to start, it always should be
permissioned. It should always be asking, do
you want this? Hey, I found you a credit card
that has a lower rate than the one you currently have.
(20:06):
Do you want me to go get you oneright?
I, I, so I think those things are super important because it's
not just about safety, it's alsoabout trust.
And to your point. This can feel kind of creepy,
and we're going to have to learnour way and help the consumer
(20:26):
get comfortable before they're going to trust it to do anything
really important. And I think there's probably 2
layers to trust because there's the trust of the agent, the
robot suddenly in charge of someof this decision making.
But I think for a lot of us, some of the financial services
providers we pick or we picked when we were, you know, starting
this journey, we're based on maybe who we trust and our
(20:48):
friends and family recommendations.
So if you've got a robot kind ofacting on your behalf like that
visibility and that maybe protection kind of disappears
and maybe that kind of rose to their trust.
I don't know what you think about that.
I think it's going to be very interesting to see who offers
these tools. Is it going to be the situation
(21:11):
where every bank and credit union and fintech is going to
offer their own? Is there going to be a third
party that offers just agents that interact with all of your
providers? Are you going to need like a
super bot? And I think a big part of that
(21:32):
calculus is going to be based onbusiness model, but I also think
a piece of this is going to relate to what is going to
engender the consumers, trust which provider, which form.
So it's very interesting. One of the companies that's
furthest ahead is Intuit. They made a huge bet on AI and
(21:59):
all of their products have AI embedded and they're continuing
to build out new use cases. So Credit Karma, QuickBooks,
these all have specific AI use cases built in.
It's taken them years to build trust and they're still at it.
And they have to actually teach the customers how to use it.
(22:22):
What can I even use it for? And they're doing it it for,
again, for very specific use cases.
It's not just like here's your agent, have fun.
So I think it's more likely to roll out in that passion.
And I think that's a really goodway to build trust because you
use it for something very specific.
(22:43):
You're it's explained to you what it's for.
There's someone guiding you through it.
And I think the providers that do that successfully, they're
going to win the win the game. I think this this area is
fascinating because I guess since 2008, you know, the last
financial crisis, there was maybe a bit of a departure of of
(23:07):
people's trust in that traditional banking system.
You had a big rise of fintech throughout kind of I guess the
last decade and a half. And we've talked to a few guests
on this show about is this aboutbanks versus fintechs or is this
kind of banks in collaboration in fintechs to deliver these,
you know, these wonderful services to the end user.
(23:32):
Where do you think this is goingin terms of, you know, the, the,
the, the next kind of evolution of kind of digital
transformation? Yeah, it's a complicated
question. And you know, to your point, we
were investing in early stage fintech companies before fintech
(23:52):
was a thing. So we have been seeding and
supporting these kinds of companies for a really long
time. And back in the mid 2000s, we
were doing it because again, we understood that it was
technology that was going to drive the next evolution.
(24:15):
And the big BM offs were going to be very slow to move, if for
no other reason than their own legacy technology.
And at the time, you know, did we think that some of these
fintechs were going to supplant JP Morgan Chase?
(24:39):
No, you know, we thought some ofthem were direct to consumer and
could definitely build a successful business.
But we also figured that a lot of them would ultimately,
ultimately be acquired by the large providers who would
essentially be buying innovation.
And that's what's happened. We've had very few IPO, big IP
(25:00):
OS of note in fintech land, whereas the giant banks, you
know, got to have to cater to everybody.
So I actually think there's roomin the market for both.
I'm probably more sanguine aboutthe ability of fintechs to, you
know, be the next giant bank or that somehow banks, Oregon
branches are going to go away. But I, but I, I, I, you know,
(25:26):
Chime, Chime may prove me wrong and I'd be happy for them to
prove me wrong. I'm very excited about what
they're doing. I think in many ways they're one
of the few fintechs that has proven at scale you can serve
consumers who don't make a ton of money and build a very
(25:48):
successful business doing it responsibly.
Interesting. Yeah.
Listen, I, I personally agree with a lot of what you said.
I've always felt that this is a,you know, a collaboration and it
kind of brings me on to my question around what you do to
support kind of this, this world.
So give us a bit of an insight into the work you do, who you're
(26:08):
working with. Yeah.
So we don't work directly with consumers.
We work with providers to get them to provide better in a way
that is both profitable and responsible.
And we essentially do 4 things. We do a tremendous amount of
(26:29):
consumer research because if youreally care about outcomes,
you've got to have deep understanding of where your
customer is coming from, where they're starting the journey.
We also run a membership networkand we, you know, work with
probably about 100 companies of varying kinds and sizes who are
(26:53):
all committed in some way to this financial health journey
and are in different places as institutions in sort of
executing against that strategy.We do some consulting.
So we'll roll up our sleeves alongside companies that want
help with product development orevaluating how a product is
working, understanding the broader landscape, understanding
(27:15):
their customers. And then the 4th which I've
talked about is we have for a long time been supporters and
investors in early stage fintechcompanies and in innovators.
So we spend a lot of time with innovators also making
introductions and connections with financial services
companies, whether for partnership, for acquisition,
(27:40):
etcetera. So I like to describe our
network as like a snow globe. There's a lot of different
interesting people and companiesand stuff going on in there and
we, you know, everyday are shaking it up to see what's
going to happen because there isno one company 1 product, you
know, that's going to solve thisproblem.
This is really about changing norms so that ultimately the
(28:05):
financial services industry understands that this is just
the way you do business, right? A focus on the outcomes of your
customers is is how you run a profitable business that your
customers actually trust and andwant to engage with I.
Want to focus on the first thingyou said, which is around the
(28:26):
customer research and other companies you're working with,
the partners you're working withnot doing their own research.
Or is this kind of supplementaryto that research?
I like to think that every company is doing their own, but
again, when you're particularly the large banks, when you're
(28:47):
serving everybody, you're you, you're serving like the vast
majority of the market, sometimes you lack depth in any
particular segment. And I also think that we are
doing the research with a particular lens in mind.
(29:07):
So we measure the state of financial health in America year
on year, and a portion of this nationally representative sample
is longitudinal. So it's the same people every
year. So we can see change over time.
And we're also asking a much broader and different set of
questions than a bank or a fintech might be asking about
(29:31):
their broader financial lives sothat we can bring real texture.
I think the other thing to note is, as an example, years ago
now, we partnered with New York University and ultimately wrote
a book called The Financial Diaries, where we spent a year
(29:52):
following 200 families in four different communities around the
country. And we documented pretty much
every dollar that flowed in and out of that household and the
decisions and choices surrounding it.
And those insights from that deep research have really change
the way even the government, theFederal Reserve, other
(30:16):
researchers think about consumerfinance.
And the biggest aha from that research, which is still
incredibly true and relevant today, is that people's
financial lives are very spiky. Both their inflows and their
outflows are not consistent frommonth to month.
(30:39):
And when they have a spike or a dip in their income, it often
doesn't match up with the spike or dip in their in their
expenses. And so in a way the the AHA is
it's cash flow stupid, right? Most of the time in this
country, particularly at the government level, we think about
(31:02):
wealth or income. Those are really important
measures, but they really don't tell the whole story.
It's the cash flow that is what matters for most people.
Yeah, we, we nod to a previous episode, we had a discussion
around kind of payday loans and how so many people are living
kind of paycheck to paycheck. Yeah, as you said, it's so
(31:24):
unpredictable what happens monthto month.
And I think the benefits of the work that you're doing and
financial health to consumers is, is pretty plain to see.
But why should banks and financial services and fintechs
care? Why do they care about this over
and above obviously looking after their their customers?
Yeah. Well, our research shows that
(31:47):
financially healthy customers are better customers.
They're stickier, they're more loyal, They use or are open to
using more products from that same institution.
So literally from a business case perspective, the more you
(32:07):
can try to improve the financialhealth of your customer, you're
essentially building a better book of business.
I think that's, I think that's the biggest reason I was talking
with a financial services executive at a top ten bank this
week who said that they don't have to make a ton of money off
(32:29):
of customers that are that don'thave a lot of money.
What they need to do is to avoidthem charging off.
If they can avoid them building up lots of overdrafts and
charging off and they can, you know, essentially break even or
make 10 or even $20.00 for the year.
(32:50):
Like that's fine. Because they have a big enough
base of customers that for the folks who, you know, make say 40
or $50,000 a year and are in a very high cost market, they,
they can make that work. So I thought that was
interesting. The things that an institution
needs to do don't have to be enormous or expensive, like
(33:14):
small changes can have a huge impact.
Is that something that a lot of the members of your community
all kind of hold true in terms of that kind of desire to
improve the financial? Is it like a an entrance exam
question to to be part of the the community?
You know it's not, not yet. We mostly care that folks are
(33:40):
serious about it that that we don't want to be window dressing
for bad actors who don't care. But it takes a lot to make
changes at big institutions. And this isn't just, oh, if you
just do these three things or offer these two products or
change these two policies, This is really a completely different
(34:02):
way of thinking about the business you're in.
Most banks really look at profit, product profitability.
But if what you care about is the outcome of your customer,
you should be looking at customer profitability.
Doesn't mean product profitability doesn't matter,
(34:25):
but it's just a very different way of approaching the work.
And it's also about what are theright metrics for success?
You know, are you measuring the financial health of your
customers either by survey or using your own transactional
data so that you can understand what impact are these products
(34:45):
or services actually having on their financial health so that
you can then make adjustments? So it's a, it's a sort of a,
it's a virtuous circle, testing,learning, measuring, repeating,
that's that's necessary. So this is something that you
guys have been doing for 21 years.
(35:06):
This is a playbook that you guyshave been following since pretty
much inception, so maybe talk about, you know, some of those
successes, how you guys have have measured success and some
of the things that you're kind of most proud of.
We've ultimately built a movement and changed the
conversation. So when I uttered the phrase
financial health a decade ago, people looked at me funny and
(35:28):
they didn't know what I was talking about.
And now that still happens occasionally, but it happens far
less. And there are people within a
range of institutions who have financial health in their title.
There are jobs within institutions dedicated to this
work. There are cross departmental
(35:50):
teams at some of the largest banks in America focused on
this. A growing number of institutions
are actually measuring the financial health of their
customers and using that data. These are all things that if I
had said this 10 years ago, no one was doing this.
In fact, last year the OCC, the the main National Bank
(36:11):
regulator, put out a white papercalled Vital Signs in which they
urged banks to measure the vitalsigns, like going to the doctor
of their customers. And laid out here are some
transactional, here's some transactional data you could
look at to do that. We encourage you to do that.
That was huge. So I think just getting the
(36:34):
industry to understand why they should care and to be in a place
to start taking action, that's probably our absolute biggest
success. You know, I'm also really proud
of the investments we've made and the companies we've helped
to seed and more importantly, the ultimate end users that
(36:54):
they've worked with. I mean our companies have
reached over 30 million consumers and provided a range
of products and services that really were meant to improve
their financial lives. That's that's a big number for a
little organization like ours. And then I think on the.
(37:15):
Huge number. On the policy front, we were the
first organization to bring together the key players in open
banking over a decade ago to start creating a set of guiding
principles for responsible data sharing.
That's what led the CFPB to ultimately create their own set
(37:37):
of principles and to ultimately take on the job of creating
rules around 10:33 of Dodd Frank, which says that consumers
own their own data. Now, I, you know, was hoping we
could claim success, but that lot, there's now a lawsuit and
(37:57):
it looks like the CFPB would like to do away with the rule
and start over. So that's a longer conversation
and a disappointment. But I think the common thread
between all of the examples I gave us, this is a long game
when you really want to change norms, it's a very long game.
(38:19):
And so I'm just really grateful that we've reached a point,
we've been at this long enough where we can actually see the
fruits of our labour. Do do you think it's a like a
generational game as well? Because for a lot of our kind of
kids, they'll be growing up in avery different world where this
is the norm to them, where, you know, whether it's technology or
(38:41):
AI powered, you know, products and services and financial
health measurements. So how do you think about that?
Does it become easy for you? You know, no, it doesn't.
I wish it did. I agree with you that
generational changes create an imperative that's very what will
(39:05):
be a very useful lever for us. But in a way, this idea that
like every financial services company is a technology company,
that's that that's over. Like people get that doesn't
mean they're doing what they need to do necessarily, but like
game over there. Everyone understands that.
(39:25):
I think the bigger issue we havewith younger generations is that
to your point, right, look at what they've lived through, look
at the country they're inheriting, look at the cost of
everything they need to do in life there.
It feels all out of reach to them, whether it's rent or
(39:48):
healthcare or higher education or childcare, these are enormous
expenses that crowd out opportunities for building
wealth. And that coupled with the
tremendous uncertainty and looking backward at the
financial crisis and at COVID, it's, I, I believe it's one of
(40:11):
the things that's driving so much interest.
In the legalized gambling we call crypto, and so I worry a
lot about their financial futures and in a way, the
problems they face are not ones that technology alone can solve.
(40:32):
Interesting. Yeah.
Well, listen, after 21 years andwith with a bunch of successes,
it would be easy to say, you know what?
I've I've done a good job. But what kind of keeps you, what
keeps a? It's a two-part question and I
get told off by the producers when I ask two-part questions.
(40:52):
But like, what a keeps you motivated?
But why? Why did you go into this world
in the first place? This is about the last thing on
earth I thought I'd be doing, honestly.
I'm a former journalist. Everybody says that on our show.
Everybody says I'd never thoughtI'd do this.
And yet they're all all here. So I'm I'm sure it's your
(41:14):
calling but. Well, that's funny.
So I like 2 part questions. I like questions in general.
I'm a, I'm an extremely curious person and you know, my favorite
question is why? Why is it that way?
Why do you do it that way? Why not another way?
(41:34):
And, and in, in a lot of ways, my, my short lived career in
journalism as a newspaper reporter was really all about
justice and fairness. That's what motivated that back
in the day when you know, journalism was actually
respected and you know, it was about the fourth estate, you
know, taking it to the man, helping the little guy search
(41:57):
for truth. And that's what motivates me and
it's what motivates me still. I really, I made the switch
because I realized I didn't justwant to write about these
things, these issues, I wanted to do something about it.
And so I wended my way and somehow ended up at a community
(42:18):
Development Bank and on the South side of Chicago.
And from there, you know, I started the organization
actually out of that bank. So in a way I'm, I'm this is all
an accident, but I think it's myability to ask questions about
something I only know a little bit about and to be a smart
(42:42):
generalist that enabled me to come into an industry like
banking and say, well, why do you do it that way?
And in banking, it's usually because, well, because we've
always done it that way, how else would we do it?
So I think that's been a, that'sbeen a big part of why I've been
able to, I speak the language enough to be able to have a
(43:02):
cogent conversation with somebody and I can still think
about creative and innovative ways of of doing things that are
actually good for business and better for customers.
I guess it's it's both a it's a very interesting industry to be
(43:25):
in for an inquisitive soul, justbecause it's so complex.
Exactly. But it's also fascinating
because it's constantly evolvingand I, I'm guessing back in 2004
you bought or, or did you kind of have a vision that it would
just change so dramatically fromthen?
I had no, I had no earthly idea.I mean, remember, we started it
(43:47):
before this thing was invented, before the iPhone was invented.
And you know, I, I wish I could say I saw that coming, but of
course I had no idea. I wish I could say I saw the
financial crisis coming. I mean, I saw there was
challenges, but you know, so no,I think we've been able.
I think the other thing that we are good at is reading the room
(44:12):
like we're always looking out ahead to try to understand
what's going on and what might be coming and to, you know,
pivot or be nimble in the face of what's going on in the world
do. You look at other areas of the
world and say, you know, that's amazing.
They're doing it really well. I wish we could do something
(44:33):
like this. Yes, I do all the time.
So our remit is, you're right, is the US largely speaking, but
in part because of our work withQueen Maxima and in part because
we're always looking for examples.
We we are a voice in the broaderglobal conversation and I am
(44:56):
really excited about a number ofinstitutions around the world.
He is the living and breathing poster child for what we're
really encouraging all institutions to do, which is to
just look at their customers andtheir data in a different way
and use that as an input to the decisions they make around the
(45:17):
products they design, the way they price them, the policies
surrounding them. That's really all we're asking.
So you've simplified the Nirvanaof financial health in banks,
financial institutions quite well there, you know, use the
data in the right way, care about your customers.
(45:40):
What? What next?
By where? How far can this go?
What? What kind of again?
Yeah. I asked what What keeps you up
at night? Little little challenges to go
and solve. Yeah, I think two things.
The the immediate thing keeping me up at night is the state of
the American economy and the dramatic policy changes being
(46:08):
wrought by this relatively new administration, and the ultimate
impact that those policies will have on the financial lives of
the people I care most about. So what impact will tariffs have
if indeed they go into effect? The labor market seems to be
(46:33):
cooling because there's a lot ofuncertainty.
And when there's uncertainty, you don't hire, you don't make
decisions, you don't invest. If the budget bill that's being
debated in Congress right now passes, millions of people will
lose their health insurance, they will lose their
supplementary food benefits. These are all things that will
(46:56):
have very significant immediate impacts on people's financial
lives. So that's the thing that is most
concerning to me right now. I think longer term, as I think
about, again, this idea of changing norms within an
industry as a whole, I feel likeI'm a little bit racing against
(47:20):
the clock. Because if you look at the top
20 banks in the United States and you look at the age of their
CE OS, it's clear that in the next 5 years, there's going to
be a significant amount of turnover, that we're going to
get new leadership at a lot of institutions.
It's already starting to happen.I mean, if Jamie Dimon and Brian
(47:41):
Moynihan are both still in the chair five years from now, that
would be shocking, just as an example.
And even at institutions where Ifeel like we have done our best
to embed this way of thinking, this approach into the fabric of
the institution at every level, I've seen it happen where the
(48:06):
next CEO comes in and has a different set of ideas and gone
is everything we've done. So really the only way to
overcome that is to make it an industry norm that this is just
the way things are done. Like it, like I would ask at the
beginning, well, why do we do itthis way?
Because this is how we always doit.
(48:27):
That's what I that's that's whatsuccessful ultimately look like
that we can withstand changes inleadership because it's just the
way the industry operates. So I don't know if you've heard
the phrase VUCA, volatile and certain, complex and ambiguous.
And. It's the world we live in.
(48:49):
It's the world we live in. And I think what's interesting
about what you've been talking about is no matter the
administration, whatever happensfrom a geopolitical standpoint,
there's always going to be change.
And it seems like financial health is, is kind of similar to
physical health. If you, if you're got a healthy
body, healthy mind, then you know, you can get, you can get
(49:10):
through this change in ambiguity.
And with financial health, you know, there is one in terms of
changing norms, but it is aroundsetting those I guess those
foundations that will help people your, you know, the the
partners you work with billion consumers manage through.
(49:31):
That's right. That's right.
Because financial, financial health isn't a destination for
consumers. It's a journey.
And so it's not that we don't think people will have financial
challenges in their lives. We know year on year that you're
going to have a financial challenge.
You may not have one for 10 years and then you're going to
have one. And the question is, can you
(49:53):
withstand it and bounce back effectively?
And if we can set people up to be ready for those kinds of
challenges, we will have done them a a world of good, and we
will have strengthened our own institutions in the process.
So using your crystal ball may be 10 years from now on the
(50:22):
Financial Health Network's 35th anniversary.
Oh God. Big, big party.
What are you sat there talking about?
What is the the next kind of 10 years of success look like?
So we actually, just a few weeksago at our conference that I
mentioned, put out an initial set of standards, standards for
(50:48):
designing checking accounts and credit cards that help people
spend Well, because the questionwe get most frequently now from
the institutions we've been working with for years and years
and years is just tell me the answer.
Like, what do you want me to do specifically?
And as much as I see the complexity in the world and I'm
(51:11):
very comfortable managing it, most people just want the
answer. And so we are, you know, the
vision is to create a library ofstandards, product design
standards for all the kinds of financial products and services
that touch people's lives and toultimately benchmark the
(51:34):
industry against, against their performance.
So in a few months, we'll put out actually a an initial
assessment of how the largest financial institutions perform
against this set of standards. And so I think in another 14
years we will have a very robust, there will be a very
(52:02):
clear and robust library of standards that make it very
clear what's expected of institutions in terms of how
they design products and experiences for customers.
And you know, banks will and other financial providers will
recognize this as a basis of competition.
(52:25):
This is this is what they have to do to be competitive with
customers in the marketplace. And as part of that, they will
be leveraging AI to help people better manage their own
financial lives and make good decisions.
(52:45):
Is that is that a global set of standards or is that focused on
the US for now? So it's interesting we we, we
built them with the US in mind, but we sent them to Peter Jacobs
at ING Netherlands and he's like, these are great.
They're totally relevant. So he's busy scoring his own
institution against them. So I think certainly in wealthy
(53:06):
countries, they could ultimatelybe universal.
I think lower income countries that's it's probably a different
a different kettle of fish. And then how much pressure do
you expect from consumers to ultimately put on their
financial service provider to adhere to these standards?
(53:29):
Do you think that this is going to be a kind of consumer driven
kind of change? I do because open banking
technology actually puts the customer in the driver's seat
more than ever before. That plus more choice and being
able to port your data to pick it up from 1 institution and say
(53:51):
I'm done with you right now. That's really hard to do.
You know how it is like, oh, I have this checking account but
all my bills are paid there and I've given the number to all
these different billers. It's a huge hassle, but imagine
being able to make a shift like with the click of a button that
(54:12):
really enables people to vote with their feet.
The data is very clear that thisis what people want and they're
not necessarily getting. It, I mean, we talked about
this, the era of choice, but there has been a barrier to, to
choice, which is the ease of switching.
And if you now have technology, AI driven technology that allows
(54:34):
switching to happen that you don't even have to participate
in because it's just picking best providers.
It's going to be super interesting to see just what
happens and how do all these financial services kind of react
in terms of, we talked to kind of previous guests around, you
(54:54):
know, user experience was, you know, really, really important
for 10-15 years. AI or robot experience has
become, is going to be very, very different and adhering to
standards you know that that people like yourselves are
putting out is going to be fascinating to see how quickly
can the people react to that. Yeah.
(55:15):
I also think that there is a role for us to play in creating
the ultimate standards that'll need to be in place for AI
financial Co pilots. But before we can even build
those standards, we really have to, we have to understand how to
evaluate them. Like, what does success look
(55:38):
like when one of these things isworking well?
And how can we then assess different tools, What does it
need to do and look like to be effective and successful and
safe for these use cases? And then from there we can build
a set of standards around it. As I said at the beginning, you
(55:59):
were the first recommendation and and invitee that we've had
on. So I'm going to ask you the same
question. We asked JP and our other guests
if there was one or two people maybe we could ask the Queen of
Queen Maximus, Sorry to come on,but apart from her and Roy
(56:19):
Harness, who would you like to see on this on this show?
I think it you got to have PeterJacobs.
He's my new favorite. He's super inspiring, but he's
also very practical. He's actually starting to
convince his peers and other running IN GS in other countries
to do what he's doing and he talks about the business case I
(56:44):
think in a really smart way. He's my vote.
Jennifer, thank you so much for joining us.
Thank you. It's been fascinating talking to
you. That's it from me this week.
To keep the conversation going, you can follow us on our socials
at the bottom of the page. And of course, don't forget to
follow the show on Spotify and subscribe on YouTube.
If you enjoyed what you heard today, leave us a review.
(57:06):
Tell your friends, or better still, do both.
We'll be back next episode to explore more life changing
innovations in digital finance. So wherever your travels take
you this week, remember to join us then for the next installment
of Money Travels presented by Visa.
It's going to sound a little crazy to say this, but I'm not a
big believer in financial literacy.
I'm much more interested in sortof real time news you can use to
help people make good decisions.That next generation of
technology is going to create enormous opportunities to help
people really improve their financial health.
(00:21):
Our research shows that financially healthy customers
are better customers. They're stickier if they're more
loyal, they are open to using more products from that same
institution. Jennifer Fisher, the founder and
CEO of the Financial Health Network.
I'll be speaking to Jennifer about the financial industry's
growing focus on people's financial health, why it
(00:43):
matters, and how new technologies are presenting
incredible opportunities to transform the way people manage
their finances. The more you can try to improve
the financial health of your customer, you're essentially I'm
building a better book of business.
Hello and welcome to another episode of Money Travels
(01:06):
presented by Visa, where we explore the extraordinary
innovations in digital finance, transforming lives and
livelihoods everywhere. I'm rich and it's only me.
Today you voted and you have your favorite host.
Now, unfortunately, Max is is onvacation.
Jennifer, welcome to the show. Thanks Rich for having me.
(01:27):
So I don't know if you know this, but at the end of each
episode, we ask people for like,recommendations of people that
they'd like to see on the show. And you were recommended and we
extended the invite to you from JP Nichols, who was our first
ever guest on the show. Oh, that's so kind of JP.
He he's, he's a great guy and and he and his team do really
(01:50):
important work. Amazing.
So listen, he'll be he'll be listening to the show and no
doubt provided me feedback on things I should have asked you
that he wouldn't hear about. But so listen, let's get into
it. I the first question I have for
you is just the, the, the words financial health, because we
talk and we've talked on the show to people around financial
(02:11):
well-being, financial literacy, financial inclusion.
Maybe you can just unpack those those two words for us.
Absolutely. 21 years ago, when Ifounded the organization, it was
actually called something different.
It was called the Center for Financial Services Innovation.
CFSI try saying that 10 times fast.
I can tell you if you can't do it.
(02:31):
And that's one of the many reasons why we ultimately
changed the name. But the real reason we changed
it is we started out focused very much on access and
inclusion to financial services.And then over the course of our
first ten years, several things happened.
The iPhone was invented, a big part of access solved.
(02:52):
We had a financial crisis. Wow, maybe those bank accounts
weren't such a good idea for people.
And then we had a Great Recession.
Wow. This isn't just a poor person's
problem. This is the majority of
Americans are who are strugglingfinancially and we missed it.
So. So what does that actually mean
for the average American? So when we measure financial
(03:14):
health, we think about people's ability to spend, save, borrow
and plan. Those are things we all need to
do and it's really not rocket science.
Can you pay your bills on time? Can you or do you?
Do you bring in more money than you spend in a given month?
(03:35):
Do you have enough short term savings?
Do you have enough long term savings?
Do you have too much debt? Do you have a good credit score?
Do you have sufficient insurance?
And do you plan ahead? That's how we really measure in
(03:55):
a more granular way. And so, you know, for someone
who's financially challenged, they're struggling to make ends
meet. They don't have enough money at
the end of the month. They're having to choose between
bills. There is no savings.
And when there is no short term savings, it's very hard to think
(04:15):
about long term savings and retirement.
They, they may have too much debt, they may have no debt
because they can't get any debt.They can't get any loans in the
1st place. But they probably don't have
very good credit score because they've they've ruined their
credit at some point by taking on too much debt that they can't
pay. They're not able to plan ahead
(04:38):
because they can't think about today.
And they probably just don't have enough protection in the
form of insurance. And, you know, unfortunately,
that's the reality for about 17%of Americans.
It's not unusual to be in that boat in a country like this.
(05:01):
And so it was in that moment that we realized that we weren't
in this just for access. We were in this to help improve
people's financial lives. And in order to improve people's
financial lives, you really haveto, as a provider, think about
the outcome, not just think about giving them a widget.
You've got to think about what'sthe outcome that people actually
(05:21):
want. And we believe that's financial
health. And we've spent the last 12 plus
years defining it, creating a framework and a measurement
methodology around it. And so we defined financial
health as having a day-to-day system that enables you to build
resilience and thrive. We think that financial health
is measurable, kind of like going to the doctor and having
(05:45):
your blood pressure taken. We believe that it's holistic.
It's not just one piece of data like your credit score.
It's got to look at the totalityof your financial life.
And we believe it's changeable and we have data that
demonstrates that. So that's how we think about
financial health. And of course, this isn't just
(06:08):
people in the financial servicesindustry who who care about
this. I think there's been a an
interesting collaboration with some royalty I've heard that
you've kind of worked on with this.
There is I get to, I get to say that I know a queen, Queen
Maxima, Her Majesty Queen Maximaof the Netherlands, who's
(06:28):
actually Argentinian by birth. She married into the family.
She for 15 years has been the United Nations Secretary
General's special advocate for, at the time, inclusive finance.
Think about financial inclusion.She really was like the
(06:50):
financial inclusion champion globally.
And over the last, say, 5 to 8 years, there's been dramatic
progress around the world as it relates to inclusion.
And so that movement started to think about, well, what next?
(07:10):
And so they looked to us becausewe had already made that shift
from access to outcomes. And we work very closely with
the Queen and her team. And I'm excited to say that last
year, at her 15th anniversary inthis role at the United Nations,
she actually changed the name ofher title from Inclusive Finance
(07:35):
to Financial Health. I thought you were going to say
the name of her actual kind of regal title for a minute, but I
guess it just, it just shows just how important the work that
is being done is to everybody and kind of it expands, it
expands generations, expands classes, expands countries.
Let's go back a few years to theadvent of open banking and, and
(07:58):
now kind of AI. How are these emerging kind of
digital capabilities changing what you were doing in the world
of financial health? I think they represent the next
generation of opportunity. So when I burst the centre, it
was really the advent of the Internet, the commercial
(08:20):
Internet that we could all use that helped me to realize that
all of a sudden we were going tobe able to reach and serve
people at a much lower price andto reach them where they were
at. In a way we had.
That was really what fueled us. And I think now, 20 years later,
(08:40):
that next generation of technology is going to create
enormous opportunities to help people really improve their
financial health. And I agree with you, it's the
combination of open banking or data and AI, because what is AI?
It's data and compute, but really it's the data, and open
(09:04):
banking is critical to help provide that data.
Can you just expand on that frompeople in the audience?
What is it about the data that'sso interesting and so impactful?
So the way I see it, Nirvana is serving a customer of one,
(09:24):
right? Extreme personalization down to
the individual, because certainly people have patterns,
financial patterns and that thatmay look like someone else's,
but at the end of the day, moneyis extremely emotional and there
are a range of factors in one's life that have an impact on it
(09:45):
at any given moment. And so being able to personalize
the advice and guidance to the human and to the moment in time
is extremely powerful. But in order to do that, you've
got to really understand the person's full financial picture.
(10:07):
So not just what they might havein their checking account or
credit card at one institution, but like what do they have in
their retirement account, if they have one?
Are they receiving any government benefits?
Those could be a significant factor in their income.
And if you're going to be tryingto make them alone using cash
(10:29):
flow underwriting, but the data you're looking at doesn't
include a really important component of their income, makes
them less likely to qualify for that loan, as an example.
So, you know, America, for better or for worse, provides
enormous choice. Overall, I'm a big fan of
(10:49):
choice. Choice is good, but it also adds
complexity. So people's financial lives,
even people who may not make a lot of money, especially people
who may not make a lot of money,their financial lives are really
complex. And having a computer brain like
an AI help people do the hard stuff.
(11:10):
But leaving the human in controlI think could be really
powerful. And how closely linked you, you
know, is that kind of financial literacy topic to financial
health, are we talking about kind of the same thing or is it
or is it slightly different? It's going to sound a little
crazy to say this, but I'm not abig believer in financial
literacy. I mean, of course I'm a
(11:31):
believer. We should all know more.
But what we know and what we do are often very different things.
So like, I know that I really shouldn't eat that doughnut, so
I cut it in half and then I go back later and just eat the
other half. That's that's me.
(11:52):
We all know we should save. This is not like something we
need to teach people. Everyone knows it would be
helpful to have a little money set aside.
It's hard to do. Even if you have a lot of money,
it can be hard to do for all kinds of reasons.
And so knowing and doing are different now.
I think it's really important that people know how to ask good
(12:15):
questions and how to be a smart consumer of all kinds of
products and services, includingfinancial products and services.
But like, I have two master's degrees.
I don't understand my mortgage documents.
I hire a lawyer for that purpose.
(12:36):
So I I think for kids it's vitalbecause that's more about
understanding how the world of finance works in general.
Adults don't tend to learn that way.
They learn in the moment. And so we talk about just in
time, information providers giving folks information, tips,
(13:00):
guidance at the moment they needit.
Like someone's in line at the grocery store, they put their
card in, they could get a text right then and there from their
bank saying this is going to overdraft your account, do you
still want to do it? That would be much more useful
to somebody than sending them a slip in the mail, literally in
(13:23):
the mail, or an e-mail a few days later saying, oh, you
overdrafted your account. So I'm much more interested in
sort of real time news you can use to help people make good
decisions. Yeah, I think I need that
message when I'm going up to thefirst half of the doughnut, let
alone the second-half of the doughnut.
Right, exactly. You know the scales telling me,
(13:45):
you know a couple of days later.I need the phone not just to
like buzz. I need the phone to like, shock
me, right? Hey, don't need that.
Is the work you're doing mainly centred around consumers or does
it also include kind of businesses, small businesses,
business owners, etcetera? Yeah.
(14:06):
So most of our work has been focused on consumers.
We have over the years done somebit some work focused on the
financial health of small businesses.
We've actually developed a framework and way to measure the
financial health of small businesses as well.
I think there it's really recognizing the connection
(14:29):
between the financial health of the business and the financial
health of the business owner whois also a consumer.
And for a lot of small businesses, it's a sole
proprietor. It's it their business and their
life are the same thing, really.But banks aren't organized that
(14:49):
way, right? Your small business over here
and your consumer over here, andnever the twain shall meet.
And that's frankly where banks and others fall down on small
business. It's one of the places because
if the financial health of the business owner isn't good,
they're not going to get the loan because they're going to
have to cosign for it anyway, right?
(15:10):
And maybe the decisions they're making about the business are
actually harming their own personal financial health,
right? Think about all of the risk that
small business owners take on intheir own personal lives to make
their dream come true with theirbusiness.
So those things are really linked and they're super
important to address together. So just wanted to pick up
something that you said about, Iguess AI and obviously what's
(15:32):
the early days of these kind of self driving wallets and using
the Gentek AI to kind of take action on people's people's
behalf, which is is scary. And for a lot of people kind of
listening, that sounds like something you'd see in a, you
know, TV documentary or something in sci-fi.
What does it take to bring this to life?
(15:54):
Let me say first that I am just as scared as the next person
about the risks that AI represents and I don't take them
lightly. And in order to enable A and AI
(16:17):
to be your financial copilot or your agent, there is a lot of
work and a lot of steps between here and there before I would
feel comfortable. I don't think we're there yet.
There's a reason why the, the, the most highly regulated
institutions aren't no, one of none of them are putting an AI
(16:41):
in front of a customer because even the closest they get is
their chat bot and that's a rules based tool.
So the risk is extraordinarily low there.
So I just want to say that very clearly to start.
How is it that you you go about kind of mitigating those risks?
(17:02):
Yeah. Well, I think one of the risks
that I'm most concerned about isbias, because the fact is, AI is
only as good as the people who train it and the data that's
used. So it's really important to make
sure that we're using data that's representative of all
(17:25):
consumers, not just people who make a lot of money or who are
extremely financially healthy, because that's not going to be
helpful. And and also we need to make
sure that it includes all kinds of data sources.
So if you're someone who gets food assistance that could, that
could account for 20% of your income ultimately.
(17:48):
And if that's not that data isn't in the in the mix, you're
missing an important piece of that person's bigger financial
story. So I think one set of risks
around bias and representativeness is really
around the data. But I also think that it's
(18:12):
really important that we're not training a these AI tools to be
providing financial advice in the way we do it just for
wealthy people, because it doesn't necessarily translate,
you know, making decisions abouthow to invest your money or when
(18:35):
to pull down Social Security andthinking about tax implications.
Those are important and and AI can will be great for that.
But that's a very different set of intelligence and decision
making than the average person needs.
I think that's really important.I think there are some decisions
(18:58):
that we make all the time that if we could have a computer,
like set it and forget it, do the same thing over and over for
us, we would do that because it's just easier and more
efficient. So think about an AI that would
(19:21):
take the money you have leftoverin your checking account every
night, sweep it into a high yield savings account and then
bring it back every day just andyou could even set some
parameters. Don't do that if right like
that. I think we have to start small.
(19:42):
I don't think this is a here's my life.
Go run it. I think.
And I also think that to start, it always should be
permissioned. It should always be asking, do
you want this? Hey, I found you a credit card
that has a lower rate than the one you currently have.
(20:06):
Do you want me to go get you oneright?
I, I, so I think those things are super important because it's
not just about safety, it's alsoabout trust.
And to your point. This can feel kind of creepy,
and we're going to have to learnour way and help the consumer
(20:26):
get comfortable before they're going to trust it to do anything
really important. And I think there's probably 2
layers to trust because there's the trust of the agent, the
robot suddenly in charge of someof this decision making.
But I think for a lot of us, some of the financial services
providers we pick or we picked when we were, you know, starting
this journey, we're based on maybe who we trust and our
(20:48):
friends and family recommendations.
So if you've got a robot kind ofacting on your behalf like that
visibility and that maybe protection kind of disappears
and maybe that kind of rose to their trust.
I don't know what you think about that.
I think it's going to be very interesting to see who offers
these tools. Is it going to be the situation
(21:11):
where every bank and credit union and fintech is going to
offer their own? Is there going to be a third
party that offers just agents that interact with all of your
providers? Are you going to need like a
super bot? And I think a big part of that
(21:32):
calculus is going to be based onbusiness model, but I also think
a piece of this is going to relate to what is going to
engender the consumers, trust which provider, which form.
So it's very interesting. One of the companies that's
furthest ahead is Intuit. They made a huge bet on AI and
(21:59):
all of their products have AI embedded and they're continuing
to build out new use cases. So Credit Karma, QuickBooks,
these all have specific AI use cases built in.
It's taken them years to build trust and they're still at it.
And they have to actually teach the customers how to use it.
(22:22):
What can I even use it for? And they're doing it it for,
again, for very specific use cases.
It's not just like here's your agent, have fun.
So I think it's more likely to roll out in that passion.
And I think that's a really goodway to build trust because you
use it for something very specific.
(22:43):
You're it's explained to you what it's for.
There's someone guiding you through it.
And I think the providers that do that successfully, they're
going to win the win the game. I think this this area is
fascinating because I guess since 2008, you know, the last
financial crisis, there was maybe a bit of a departure of of
(23:07):
people's trust in that traditional banking system.
You had a big rise of fintech throughout kind of I guess the
last decade and a half. And we've talked to a few guests
on this show about is this aboutbanks versus fintechs or is this
kind of banks in collaboration in fintechs to deliver these,
you know, these wonderful services to the end user.
(23:32):
Where do you think this is goingin terms of, you know, the, the,
the, the next kind of evolution of kind of digital
transformation? Yeah, it's a complicated
question. And you know, to your point, we
were investing in early stage fintech companies before fintech
(23:52):
was a thing. So we have been seeding and
supporting these kinds of companies for a really long
time. And back in the mid 2000s, we
were doing it because again, we understood that it was
technology that was going to drive the next evolution.
(24:15):
And the big BM offs were going to be very slow to move, if for
no other reason than their own legacy technology.
And at the time, you know, did we think that some of these
fintechs were going to supplant JP Morgan Chase?
(24:39):
No, you know, we thought some ofthem were direct to consumer and
could definitely build a successful business.
But we also figured that a lot of them would ultimately,
ultimately be acquired by the large providers who would
essentially be buying innovation.
And that's what's happened. We've had very few IPO, big IP
(25:00):
OS of note in fintech land, whereas the giant banks, you
know, got to have to cater to everybody.
So I actually think there's roomin the market for both.
I'm probably more sanguine aboutthe ability of fintechs to, you
know, be the next giant bank or that somehow banks, Oregon
branches are going to go away. But I, but I, I, I, you know,
(25:26):
Chime, Chime may prove me wrong and I'd be happy for them to
prove me wrong. I'm very excited about what
they're doing. I think in many ways they're one
of the few fintechs that has proven at scale you can serve
consumers who don't make a ton of money and build a very
(25:48):
successful business doing it responsibly.
Interesting. Yeah.
Listen, I, I personally agree with a lot of what you said.
I've always felt that this is a,you know, a collaboration and it
kind of brings me on to my question around what you do to
support kind of this, this world.
So give us a bit of an insight into the work you do, who you're
(26:08):
working with. Yeah.
So we don't work directly with consumers.
We work with providers to get them to provide better in a way
that is both profitable and responsible.
And we essentially do 4 things. We do a tremendous amount of
(26:29):
consumer research because if youreally care about outcomes,
you've got to have deep understanding of where your
customer is coming from, where they're starting the journey.
We also run a membership networkand we, you know, work with
probably about 100 companies of varying kinds and sizes who are
(26:53):
all committed in some way to this financial health journey
and are in different places as institutions in sort of
executing against that strategy.We do some consulting.
So we'll roll up our sleeves alongside companies that want
help with product development orevaluating how a product is
working, understanding the broader landscape, understanding
(27:15):
their customers. And then the 4th which I've
talked about is we have for a long time been supporters and
investors in early stage fintechcompanies and in innovators.
So we spend a lot of time with innovators also making
introductions and connections with financial services
companies, whether for partnership, for acquisition,
(27:40):
etcetera. So I like to describe our
network as like a snow globe. There's a lot of different
interesting people and companiesand stuff going on in there and
we, you know, everyday are shaking it up to see what's
going to happen because there isno one company 1 product, you
know, that's going to solve thisproblem.
This is really about changing norms so that ultimately the
(28:05):
financial services industry understands that this is just
the way you do business, right? A focus on the outcomes of your
customers is is how you run a profitable business that your
customers actually trust and andwant to engage with I.
Want to focus on the first thingyou said, which is around the
(28:26):
customer research and other companies you're working with,
the partners you're working withnot doing their own research.
Or is this kind of supplementaryto that research?
I like to think that every company is doing their own, but
again, when you're particularly the large banks, when you're
(28:47):
serving everybody, you're you, you're serving like the vast
majority of the market, sometimes you lack depth in any
particular segment. And I also think that we are
doing the research with a particular lens in mind.
(29:07):
So we measure the state of financial health in America year
on year, and a portion of this nationally representative sample
is longitudinal. So it's the same people every
year. So we can see change over time.
And we're also asking a much broader and different set of
questions than a bank or a fintech might be asking about
(29:31):
their broader financial lives sothat we can bring real texture.
I think the other thing to note is, as an example, years ago
now, we partnered with New York University and ultimately wrote
a book called The Financial Diaries, where we spent a year
(29:52):
following 200 families in four different communities around the
country. And we documented pretty much
every dollar that flowed in and out of that household and the
decisions and choices surrounding it.
And those insights from that deep research have really change
the way even the government, theFederal Reserve, other
(30:16):
researchers think about consumerfinance.
And the biggest aha from that research, which is still
incredibly true and relevant today, is that people's
financial lives are very spiky. Both their inflows and their
outflows are not consistent frommonth to month.
(30:39):
And when they have a spike or a dip in their income, it often
doesn't match up with the spike or dip in their in their
expenses. And so in a way the the AHA is
it's cash flow stupid, right? Most of the time in this
country, particularly at the government level, we think about
(31:02):
wealth or income. Those are really important
measures, but they really don't tell the whole story.
It's the cash flow that is what matters for most people.
Yeah, we, we nod to a previous episode, we had a discussion
around kind of payday loans and how so many people are living
kind of paycheck to paycheck. Yeah, as you said, it's so
(31:24):
unpredictable what happens monthto month.
And I think the benefits of the work that you're doing and
financial health to consumers is, is pretty plain to see.
But why should banks and financial services and fintechs
care? Why do they care about this over
and above obviously looking after their their customers?
Yeah. Well, our research shows that
(31:47):
financially healthy customers are better customers.
They're stickier, they're more loyal, They use or are open to
using more products from that same institution.
So literally from a business case perspective, the more you
(32:07):
can try to improve the financialhealth of your customer, you're
essentially building a better book of business.
I think that's, I think that's the biggest reason I was talking
with a financial services executive at a top ten bank this
week who said that they don't have to make a ton of money off
(32:29):
of customers that are that don'thave a lot of money.
What they need to do is to avoidthem charging off.
If they can avoid them building up lots of overdrafts and
charging off and they can, you know, essentially break even or
make 10 or even $20.00 for the year.
(32:50):
Like that's fine. Because they have a big enough
base of customers that for the folks who, you know, make say 40
or $50,000 a year and are in a very high cost market, they,
they can make that work. So I thought that was
interesting. The things that an institution
needs to do don't have to be enormous or expensive, like
(33:14):
small changes can have a huge impact.
Is that something that a lot of the members of your community
all kind of hold true in terms of that kind of desire to
improve the financial? Is it like a an entrance exam
question to to be part of the the community?
You know it's not, not yet. We mostly care that folks are
(33:40):
serious about it that that we don't want to be window dressing
for bad actors who don't care. But it takes a lot to make
changes at big institutions. And this isn't just, oh, if you
just do these three things or offer these two products or
change these two policies, This is really a completely different
(34:02):
way of thinking about the business you're in.
Most banks really look at profit, product profitability.
But if what you care about is the outcome of your customer,
you should be looking at customer profitability.
Doesn't mean product profitability doesn't matter,
(34:25):
but it's just a very different way of approaching the work.
And it's also about what are theright metrics for success?
You know, are you measuring the financial health of your
customers either by survey or using your own transactional
data so that you can understand what impact are these products
(34:45):
or services actually having on their financial health so that
you can then make adjustments? So it's a, it's a sort of a,
it's a virtuous circle, testing,learning, measuring, repeating,
that's that's necessary. So this is something that you
guys have been doing for 21 years.
(35:06):
This is a playbook that you guyshave been following since pretty
much inception, so maybe talk about, you know, some of those
successes, how you guys have have measured success and some
of the things that you're kind of most proud of.
We've ultimately built a movement and changed the
conversation. So when I uttered the phrase
financial health a decade ago, people looked at me funny and
(35:28):
they didn't know what I was talking about.
And now that still happens occasionally, but it happens far
less. And there are people within a
range of institutions who have financial health in their title.
There are jobs within institutions dedicated to this
work. There are cross departmental
(35:50):
teams at some of the largest banks in America focused on
this. A growing number of institutions
are actually measuring the financial health of their
customers and using that data. These are all things that if I
had said this 10 years ago, no one was doing this.
In fact, last year the OCC, the the main National Bank
(36:11):
regulator, put out a white papercalled Vital Signs in which they
urged banks to measure the vitalsigns, like going to the doctor
of their customers. And laid out here are some
transactional, here's some transactional data you could
look at to do that. We encourage you to do that.
That was huge. So I think just getting the
(36:34):
industry to understand why they should care and to be in a place
to start taking action, that's probably our absolute biggest
success. You know, I'm also really proud
of the investments we've made and the companies we've helped
to seed and more importantly, the ultimate end users that
(36:54):
they've worked with. I mean our companies have
reached over 30 million consumers and provided a range
of products and services that really were meant to improve
their financial lives. That's that's a big number for a
little organization like ours. And then I think on the.
(37:15):
Huge number. On the policy front, we were the
first organization to bring together the key players in open
banking over a decade ago to start creating a set of guiding
principles for responsible data sharing.
That's what led the CFPB to ultimately create their own set
(37:37):
of principles and to ultimately take on the job of creating
rules around 10:33 of Dodd Frank, which says that consumers
own their own data. Now, I, you know, was hoping we
could claim success, but that lot, there's now a lawsuit and
(37:57):
it looks like the CFPB would like to do away with the rule
and start over. So that's a longer conversation
and a disappointment. But I think the common thread
between all of the examples I gave us, this is a long game
when you really want to change norms, it's a very long game.
(38:19):
And so I'm just really grateful that we've reached a point,
we've been at this long enough where we can actually see the
fruits of our labour. Do do you think it's a like a
generational game as well? Because for a lot of our kind of
kids, they'll be growing up in avery different world where this
is the norm to them, where, you know, whether it's technology or
(38:41):
AI powered, you know, products and services and financial
health measurements. So how do you think about that?
Does it become easy for you? You know, no, it doesn't.
I wish it did. I agree with you that
generational changes create an imperative that's very what will
(39:05):
be a very useful lever for us. But in a way, this idea that
like every financial services company is a technology company,
that's that that's over. Like people get that doesn't
mean they're doing what they need to do necessarily, but like
game over there. Everyone understands that.
(39:25):
I think the bigger issue we havewith younger generations is that
to your point, right, look at what they've lived through, look
at the country they're inheriting, look at the cost of
everything they need to do in life there.
It feels all out of reach to them, whether it's rent or
(39:48):
healthcare or higher education or childcare, these are enormous
expenses that crowd out opportunities for building
wealth. And that coupled with the
tremendous uncertainty and looking backward at the
financial crisis and at COVID, it's, I, I believe it's one of
(40:11):
the things that's driving so much interest.
In the legalized gambling we call crypto, and so I worry a
lot about their financial futures and in a way, the
problems they face are not ones that technology alone can solve.
(40:32):
Interesting. Yeah.
Well, listen, after 21 years andwith with a bunch of successes,
it would be easy to say, you know what?
I've I've done a good job. But what kind of keeps you, what
keeps a? It's a two-part question and I
get told off by the producers when I ask two-part questions.
(40:52):
But like, what a keeps you motivated?
But why? Why did you go into this world
in the first place? This is about the last thing on
earth I thought I'd be doing, honestly.
I'm a former journalist. Everybody says that on our show.
Everybody says I'd never thoughtI'd do this.
And yet they're all all here. So I'm I'm sure it's your
(41:14):
calling but. Well, that's funny.
So I like 2 part questions. I like questions in general.
I'm a, I'm an extremely curious person and you know, my favorite
question is why? Why is it that way?
Why do you do it that way? Why not another way?
(41:34):
And, and in, in a lot of ways, my, my short lived career in
journalism as a newspaper reporter was really all about
justice and fairness. That's what motivated that back
in the day when you know, journalism was actually
respected and you know, it was about the fourth estate, you
know, taking it to the man, helping the little guy search
(41:57):
for truth. And that's what motivates me and
it's what motivates me still. I really, I made the switch
because I realized I didn't justwant to write about these
things, these issues, I wanted to do something about it.
And so I wended my way and somehow ended up at a community
(42:18):
Development Bank and on the South side of Chicago.
And from there, you know, I started the organization
actually out of that bank. So in a way I'm, I'm this is all
an accident, but I think it's myability to ask questions about
something I only know a little bit about and to be a smart
(42:42):
generalist that enabled me to come into an industry like
banking and say, well, why do you do it that way?
And in banking, it's usually because, well, because we've
always done it that way, how else would we do it?
So I think that's been a, that'sbeen a big part of why I've been
able to, I speak the language enough to be able to have a
(43:02):
cogent conversation with somebody and I can still think
about creative and innovative ways of of doing things that are
actually good for business and better for customers.
I guess it's it's both a it's a very interesting industry to be
(43:25):
in for an inquisitive soul, justbecause it's so complex.
Exactly. But it's also fascinating
because it's constantly evolvingand I, I'm guessing back in 2004
you bought or, or did you kind of have a vision that it would
just change so dramatically fromthen?
I had no, I had no earthly idea.I mean, remember, we started it
(43:47):
before this thing was invented, before the iPhone was invented.
And you know, I, I wish I could say I saw that coming, but of
course I had no idea. I wish I could say I saw the
financial crisis coming. I mean, I saw there was
challenges, but you know, so no,I think we've been able.
I think the other thing that we are good at is reading the room
(44:12):
like we're always looking out ahead to try to understand
what's going on and what might be coming and to, you know,
pivot or be nimble in the face of what's going on in the world
do. You look at other areas of the
world and say, you know, that's amazing.
They're doing it really well. I wish we could do something
(44:33):
like this. Yes, I do all the time.
So our remit is, you're right, is the US largely speaking, but
in part because of our work withQueen Maxima and in part because
we're always looking for examples.
We we are a voice in the broaderglobal conversation and I am
(44:56):
really excited about a number ofinstitutions around the world.
He is the living and breathing poster child for what we're
really encouraging all institutions to do, which is to
just look at their customers andtheir data in a different way
and use that as an input to the decisions they make around the
(45:17):
products they design, the way they price them, the policies
surrounding them. That's really all we're asking.
So you've simplified the Nirvanaof financial health in banks,
financial institutions quite well there, you know, use the
data in the right way, care about your customers.
(45:40):
What? What next?
By where? How far can this go?
What? What kind of again?
Yeah. I asked what What keeps you up
at night? Little little challenges to go
and solve. Yeah, I think two things.
The the immediate thing keeping me up at night is the state of
the American economy and the dramatic policy changes being
(46:08):
wrought by this relatively new administration, and the ultimate
impact that those policies will have on the financial lives of
the people I care most about. So what impact will tariffs have
if indeed they go into effect? The labor market seems to be
(46:33):
cooling because there's a lot ofuncertainty.
And when there's uncertainty, you don't hire, you don't make
decisions, you don't invest. If the budget bill that's being
debated in Congress right now passes, millions of people will
lose their health insurance, they will lose their
supplementary food benefits. These are all things that will
(46:56):
have very significant immediate impacts on people's financial
lives. So that's the thing that is most
concerning to me right now. I think longer term, as I think
about, again, this idea of changing norms within an
industry as a whole, I feel likeI'm a little bit racing against
(47:20):
the clock. Because if you look at the top
20 banks in the United States and you look at the age of their
CE OS, it's clear that in the next 5 years, there's going to
be a significant amount of turnover, that we're going to
get new leadership at a lot of institutions.
It's already starting to happen.I mean, if Jamie Dimon and Brian
(47:41):
Moynihan are both still in the chair five years from now, that
would be shocking, just as an example.
And even at institutions where Ifeel like we have done our best
to embed this way of thinking, this approach into the fabric of
the institution at every level, I've seen it happen where the
(48:06):
next CEO comes in and has a different set of ideas and gone
is everything we've done. So really the only way to
overcome that is to make it an industry norm that this is just
the way things are done. Like it, like I would ask at the
beginning, well, why do we do itthis way?
Because this is how we always doit.
(48:27):
That's what I that's that's whatsuccessful ultimately look like
that we can withstand changes inleadership because it's just the
way the industry operates. So I don't know if you've heard
the phrase VUCA, volatile and certain, complex and ambiguous.
And. It's the world we live in.
(48:49):
It's the world we live in. And I think what's interesting
about what you've been talking about is no matter the
administration, whatever happensfrom a geopolitical standpoint,
there's always going to be change.
And it seems like financial health is, is kind of similar to
physical health. If you, if you're got a healthy
body, healthy mind, then you know, you can get, you can get
(49:10):
through this change in ambiguity.
And with financial health, you know, there is one in terms of
changing norms, but it is aroundsetting those I guess those
foundations that will help people your, you know, the the
partners you work with billion consumers manage through.
(49:31):
That's right. That's right.
Because financial, financial health isn't a destination for
consumers. It's a journey.
And so it's not that we don't think people will have financial
challenges in their lives. We know year on year that you're
going to have a financial challenge.
You may not have one for 10 years and then you're going to
have one. And the question is, can you
(49:53):
withstand it and bounce back effectively?
And if we can set people up to be ready for those kinds of
challenges, we will have done them a a world of good, and we
will have strengthened our own institutions in the process.
So using your crystal ball may be 10 years from now on the
(50:22):
Financial Health Network's 35th anniversary.
Oh God. Big, big party.
What are you sat there talking about?
What is the the next kind of 10 years of success look like?
So we actually, just a few weeksago at our conference that I
mentioned, put out an initial set of standards, standards for
(50:48):
designing checking accounts and credit cards that help people
spend Well, because the questionwe get most frequently now from
the institutions we've been working with for years and years
and years is just tell me the answer.
Like, what do you want me to do specifically?
And as much as I see the complexity in the world and I'm
(51:11):
very comfortable managing it, most people just want the
answer. And so we are, you know, the
vision is to create a library ofstandards, product design
standards for all the kinds of financial products and services
that touch people's lives and toultimately benchmark the
(51:34):
industry against, against their performance.
So in a few months, we'll put out actually a an initial
assessment of how the largest financial institutions perform
against this set of standards. And so I think in another 14
years we will have a very robust, there will be a very
(52:02):
clear and robust library of standards that make it very
clear what's expected of institutions in terms of how
they design products and experiences for customers.
And you know, banks will and other financial providers will
recognize this as a basis of competition.
(52:25):
This is this is what they have to do to be competitive with
customers in the marketplace. And as part of that, they will
be leveraging AI to help people better manage their own
financial lives and make good decisions.
(52:45):
Is that is that a global set of standards or is that focused on
the US for now? So it's interesting we we, we
built them with the US in mind, but we sent them to Peter Jacobs
at ING Netherlands and he's like, these are great.
They're totally relevant. So he's busy scoring his own
institution against them. So I think certainly in wealthy
(53:06):
countries, they could ultimatelybe universal.
I think lower income countries that's it's probably a different
a different kettle of fish. And then how much pressure do
you expect from consumers to ultimately put on their
financial service provider to adhere to these standards?
(53:29):
Do you think that this is going to be a kind of consumer driven
kind of change? I do because open banking
technology actually puts the customer in the driver's seat
more than ever before. That plus more choice and being
able to port your data to pick it up from 1 institution and say
(53:51):
I'm done with you right now. That's really hard to do.
You know how it is like, oh, I have this checking account but
all my bills are paid there and I've given the number to all
these different billers. It's a huge hassle, but imagine
being able to make a shift like with the click of a button that
(54:12):
really enables people to vote with their feet.
The data is very clear that thisis what people want and they're
not necessarily getting. It, I mean, we talked about
this, the era of choice, but there has been a barrier to, to
choice, which is the ease of switching.
And if you now have technology, AI driven technology that allows
(54:34):
switching to happen that you don't even have to participate
in because it's just picking best providers.
It's going to be super interesting to see just what
happens and how do all these financial services kind of react
in terms of, we talked to kind of previous guests around, you
(54:54):
know, user experience was, you know, really, really important
for 10-15 years. AI or robot experience has
become, is going to be very, very different and adhering to
standards you know that that people like yourselves are
putting out is going to be fascinating to see how quickly
can the people react to that. Yeah.
(55:15):
I also think that there is a role for us to play in creating
the ultimate standards that'll need to be in place for AI
financial Co pilots. But before we can even build
those standards, we really have to, we have to understand how to
evaluate them. Like, what does success look
(55:38):
like when one of these things isworking well?
And how can we then assess different tools, What does it
need to do and look like to be effective and successful and
safe for these use cases? And then from there we can build
a set of standards around it. As I said at the beginning, you
(55:59):
were the first recommendation and and invitee that we've had
on. So I'm going to ask you the same
question. We asked JP and our other guests
if there was one or two people maybe we could ask the Queen of
Queen Maximus, Sorry to come on,but apart from her and Roy
(56:19):
Harness, who would you like to see on this on this show?
I think it you got to have PeterJacobs.
He's my new favorite. He's super inspiring, but he's
also very practical. He's actually starting to
convince his peers and other running IN GS in other countries
to do what he's doing and he talks about the business case I
(56:44):
think in a really smart way. He's my vote.
Jennifer, thank you so much for joining us.
Thank you. It's been fascinating talking to
you. That's it from me this week.
To keep the conversation going, you can follow us on our socials
at the bottom of the page. And of course, don't forget to
follow the show on Spotify and subscribe on YouTube.
If you enjoyed what you heard today, leave us a review.
(57:06):
Tell your friends, or better still, do both.
We'll be back next episode to explore more life changing
innovations in digital finance. So wherever your travels take
you this week, remember to join us then for the next installment
of Money Travels presented by Visa.
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