Reimagining financial health: Innovation and regulation in the UK’s financial services

Sopra Steria, in collaboration with FinTech Scotland and the University of Glasgow, has published a new whitepaper: “Consumers at the heart of innovation: Financial health evaluation in the UK.” This paper explores how technology, regulation and new engagement models are reshaping the financial health landscape - and what this means for industry leaders.

The rising tide of financial vulnerability UK consumers are grappling with growing financial stress. Non-mortgage household debt now exceeds £17,000 on average and over 12.8 million adults feel overwhelmed or in difficulty, according to the FCA. One in four adults lacks financial resilience and one in ten has no savings at all.

Traditional financial products and services often fail to meet the needs of these groups. As the whitepaper outlines, there is a pressing need for more inclusive, flexible and accessible solutions.

A shift from creditworthiness to financial health

Traditional credit scoring models rely on retrospective data and often miss early signs of distress. Sopra Steria’s whitepaper calls for a shift toward a more holistic, forward-looking model of financial health - one that incorporates income stability, spending behaviour, savings patterns, life-changing events and regional economic data.

“The future of financial services must move beyond traditional creditworthiness and embrace a more inclusive understanding of financial health,” says co-author Kal Bukovski, Consulting Senior Manager and Director of Academia and Research at Sopra Steria.

The regulatory response: from compliance to purpose

The FCA’s Consumer Duty marks a major step toward purpose-led regulation, encouraging firms to focus on consumer outcomes rather than compliance alone. Initiatives like Breathing Space and the High-Cost Credit Review reinforce the growing regulatory emphasis on fairness, affordability and inclusion.

Sopra Steria urges firms to go further - embedding financial wellbeing into the core of strategy, product design and data ethics.

Technology as a catalyst

AI and advanced analytics are enabling earlier interventions, helping identify at-risk consumers through spending patterns or increased credit usage. Tools such as robo-advisors are broadening access to personalised financial guidance, particularly for those with limited resources or financial literacy.

The expansion from Open Banking to Open Finance also presents new opportunities to deliver tailored support across banking, insurance, pensions and investments - if trust and data ethics are prioritised. - if trust and data ethics are prioritised.

“Open Finance has the potential to shift power back to the consumer - but that depends on inclusion and responsible innovation,” says Bukovski.

Financial Services Programme activities

The techUK Financial Services programme connects tech firms, the FS industry, and regulators to ensure innovation and technology can be fully embraced. Through market engagement activities and events, we help to empower decision makers and aid collaboration.