In an era where financial systems are rapidly evolving with digital innovations and economic uncertainties, the concept of “financial health” has emerged as a critical focus for policymakers worldwide. The latest FSI Insights paper, titled Financial Health in Review: Current Practices in Different Financial Authorities, published in October 2025 by the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) in collaboration with the World Bank Group, provides a timely stocktake of how national financial authorities are approaching this multidimensional issue. Authored by Sheirin Iravantchi (World Bank), Jermy Prenio (BIS), and Friederike Rühmann (World Bank), the paper draws on desk research and in-depth interviews with representatives from seven financial authorities across advanced economies (AEs) and emerging market and developing economies (EMDEs): the Australian Securities and Investments Commission (ASIC), Central Bank of Brazil (BCB), Financial Consumer Agency of Canada (FCAC), Central Bank of Jordan (CBJ), Central Bank of Kenya (CBK), UK Money and Pensions Service (MaPS), and the US Office of the Comptroller of the Currency (OCC).
This 32-page report does not prescribe recommendations but aims to foster peer learning by highlighting diverse strategies for defining, measuring, and promoting financial health—also interchangeably termed financial well-being. It underscores the shift from mere financial inclusion to actual outcomes that enhance individuals’ ability to manage finances, withstand shocks, pursue goals, and achieve satisfaction. For the full details, download the paper here.
The Interplay of Financial Inclusion, Regulation, and Literacy
The paper positions financial health as an extension of traditional pillars like financial inclusion, consumer protection, and financial literacy. While inclusion ensures access to services such as savings, credit, and insurance, it alone does not guarantee well-being. Effective financial regulations address market failures, protect consumers from risks, and maintain stability, preventing issues like overindebtedness or predatory practices. Financial literacy empowers individuals to make informed decisions, but the report notes that rapid innovation—such as digital credit—outpaces education efforts, necessitating a combined approach.
Drawing on evidence, the authors argue that robust consumer protection frameworks, including transparent disclosures and equitable service delivery, are vital. For instance, in digital finance, regulations mandating upfront cost revelations for loans help mitigate confusion and misuse. The paper also highlights how prudential regulations on institutions’ risk-taking indirectly safeguard consumers, emphasizing a “people-centered” view of financial risks.
The Rise of Financial Health on the Global Stage
Financial health has gained traction amid growing financial complexity and innovation. The report traces its emergence, noting that consumers often lack the expertise to navigate diverse products, leading to suboptimal outcomes. It references the G20 Global Partnership for Financial Inclusion (GPFI)’s 2024 working definition, which outlines four dimensions: managing needs and obligations, coping with shocks, pursuing aspirations, and feeling confident—tailored to country contexts.
International bodies like the OECD, UNSGSA (now focused on financial health), and CGAP have elevated the agenda. The 2023 GPFI Financial Inclusion Action Plan links well-being to quality inclusion, while the Brazilian G20 Presidency in 2024 prioritized analytical work on the topic. Evidence from studies, such as those by Kempson et al. (2017) and CFPB (2015), shows drivers like income stability, financial behavior, and access to services influencing health, with behavioral factors (e.g., budgeting) proving as crucial as economic ones.
Insights from National Authorities: Diverse Approaches
A core section of the paper examines experiences from the interviewed authorities, revealing variations shaped by institutional mandates and contexts.
- Motivations: Authorities pursue financial health to complement inclusion efforts, inform policies, and address vulnerabilities. For example, CBK in Kenya uses it to tackle digital credit risks, while FCAC in Canada integrates it into literacy strategies.
- Definitions: Most align with the GPFI framework but adapt locally. ASIC focuses on resilience and capability; BCB emphasizes control, cushion, options, and freedom; CBJ includes insurance uptake for protection.
- Measurement: Approaches blend objective (e.g., savings levels) and subjective (e.g., confidence) elements. Some use a single score (e.g., FCAC’s 0-100 index), others multiple indicators. Surveys are common, but challenges include subjectivity debates and data comparability.
- Data Collection and Monitoring: Methods vary in scale and frequency—CBK’s large-scale FinAccess surveys every few years contrast with MaPS’s annual trackers. Issues like low response rates and integrating administrative data are noted.
- Interventions: Data informs targeted education (e.g., FCAC’s gamified programs for girls) and protections (e.g., BCB’s debt indicators for risk assessments). Some explore broader uses, like influencing prudential rules or encouraging banks to tailor products.
The report stresses collaboration across ecosystems, involving governments, providers, and civil society, as no single entity can address all facets.
Conclusions and Future Directions
The paper concludes that financial health requires holistic, collaborative efforts beyond the financial sector. Key takeaways include the need for standardized yet adaptable metrics to guide policies, leveraging existing tools like consumer protection frameworks, and addressing survey challenges through administrative data. It highlights opportunities for regulators to identify vulnerabilities, enhance product quality, and monitor progress, ultimately building resilient systems.
As global efforts evolve, the authors advocate for refining indicators, fostering cross-sector partnerships, and sharing best practices to promote inclusive financial well-being.
References
- Iravantchi, S., Prenio, J., & Rühmann, F. (2025). Financial health in review: current practices in different financial authorities. FSI Insights No. 68, Bank for International Settlements. Available at: https://www.bis.org/fsi/publ/insights68.pdf
- G20 Global Partnership for Financial Inclusion (GPFI). (2024). G20 policy note on financial well-being. November.
- Consumer Financial Protection Bureau (CFPB). (2015). Financial well-being: The goal of financial education. January.
- Kempson, E., Finney, A., & Poppe, C. (2017). Financial well-being: A conceptual model and preliminary analysis. Working Paper.
- Organisation for Economic Co-operation and Development (OECD). (2020). Recommendation of the Council on Financial Literacy. October.
- United Nations Secretary-General’s Special Advocate for Financial Health (UNSGSA). (2024). Queen Maxima appointed UN Secretary-General’s Special Advocate for Financial Health. September.
Disclaimer
The content on MarketsFN.com is provided for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or trading guidance. All investments involve risks, and past performance does not guarantee future results. You are solely responsible for your investment decisions and should conduct independent research and consult a qualified financial advisor before acting. MarketsFN.com and its authors are not liable for any losses or damages arising from your use of this information.
