On October 22, the Consumer Financial Protection Bureau (CFPB) finalized its Personal Financial Data Rights Rule, which seeks to empower consumers with greater control over their financial data. At its core, the rule enables customers to move their data freely between financial institutions at no cost and allows them to revoke access to their data immediately upon request. This change is set to significantly impact how financial services organizations, from traditional banks to fintech companies, manage customer relationships, retain business, and acquire new clients.
The implementation of this rule introduces a new set of regulations for financial institutions, particularly those related to managing customer attrition. As data portability becomes easier and faster, customers can seamlessly transfer their financial history to competitors, heightening the need for sophisticated retention strategies that go beyond basic service improvements. With a heightened focus on driving exceptional customer experiences, financial institutions that prioritize existing relationships and deterring silent attrition will be successful.
The CFPB notes that, “compliance with the rule will be implemented in phases, with larger providers subject to the rule sooner than smaller ones. Financial firms will be required to comply based on their size; the largest institutions will have to comply by April 1, 2026, while the smallest covered institutions will have until April 1, 2030. Certain small banks and credit unions are not subject to this rule.”
The Rise of Personalization and Engagement
Historically, one of the biggest obstacles preventing customers from switching financial institutions was the cumbersome process of moving accounts, a task made even more daunting by the loss of financial history. However, with this new rule in place, that barrier is removed, and customers now have greater freedom to choose a new provider that better suits their needs. This shift places customer expectations at the forefront of the financial services experience. As inflation and economic pressures cause consumers to reevaluate their financial priorities, the relationship between customers and their primary financial institutions will be more critical than ever.
To stay ahead, financial service providers need to invest in developing tailored experiences that drive deeper customer engagement and build longer-lasting loyalty. These personalized strategies should focus on recognizing and responding to subtle shifts in customer behavior, preventing silent attrition — the gradual, often undetected disengagement of customers — and fostering a stronger emotional connection between the customer and the institution.
Silent Attrition and the Role of AI
Silent attrition has always been a challenge for financial services providers. It typically manifests as a series of small, nearly imperceptible actions that signal a customer’s departure. Artificial intelligence (AI) is beginning to play a key role in identifying these subtle shifts by analyzing early warning signs of disengagement. With AI and Master Data Management (MDM) systems, financial institutions can better understand the behaviors that indicate a customer may be quietly leaving and give them the chance to proactively intervene to retain their business.
To effectively use AI, institutions should ensure that marketing, service, and sales efforts are seamlessly integrated. It’s essential that every customer touchpoint — whether digital, in-person, or through support channels — deliver relevant and personalized experiences that build trust and loyalty. Marketers will need the tools and confidence to pivot quickly when a customer expresses dissatisfaction, adjusting messaging and offers in real time to address concerns.
Optimizing Customer Acquisition Across Channels
Acquiring new customers will remain a top priority for financial institutions, but the landscape for customer acquisition has shifted. According to a 2023 BAI survey, nearly a quarter of consumers would consider switching from traditional banks to online banks that offer better rates. As the ease of switching becomes more pronounced, institutions will want to rethink how they approach both acquisition and retention. A strong acquisition strategy is best rooted in deep insights into customer preferences, both online and offline, and in their personal and professional lives to get a 360-view of the individual.
Targeting prospects across multiple channels requires a combination of art and science. An important part of this is delivering consistent, compelling messages that highlight the benefits of switching banks — whether it is superior products, exceptional service, or fewer fees. However, as customers face fewer barriers to moving their financial accounts, acquisition strategies may also want to account for potential increased costs of conversion.
Incorporating Data Privacy Compliance
One of the most significant aspects of the new rule is the requirement that financial institutions immediately honor a consumer’s request to revoke access to their data. This presents a unique challenge, particularly when consumer data is dispersed across various advertising and marketing technology platforms, and operational systems. As such, it is important for institutions to confidently sever data connections upon request and ensure that no further communications are sent to that individual and privacy preferences are not violated.
According to the CFPB, the final rule strengthens protections for consumers’ data by banning bait-and-switch data harvesting. Third parties can only collect, use, or retain data to deliver the product the consumer requested. They cannot secretly collect, use, or retain consumers’ data for their own unrelated business reasons – for example, by offering consumers a loan using consumer data that they also use for targeted advertising. The rule does not prohibit any particular uses of data, but it requires that all use be driven by what is necessary to deliver the product sought by the consumer.
The rule also creates revocation and deletion rights. “When a person revokes access, the rule requires that data access end immediately, and deletion would be the default practice. Access can be maintained for no more than one year, absent express reauthorization. To prevent ‘dark patterns’ from emerging, the process to revoke access must be simple and straightforward.”
Building an Identity Framework for Better Engagement and Compliance
The creation of a brand-owned identity framework is essential for navigating the complexities of consumer data, privacy compliance, and effective marketing. This framework would act as a central repository of customer information, allowing financial institutions to seamlessly integrate data from both digital and name-based sources. By stitching together disparate data points from their Ad and Martech platforms, providers can create a unified, holistic view of their customers, enabling more effective, personalized marketing.
In addition, this provides an opportunity to enhance AI-driven marketing strategies. With accurate, high-quality data, financial institutions can refine their customer engagement efforts, targeting the right message to the right person at the right time. These data-driven approaches will be crucial as financial institutions compete for customers in a rapidly evolving market.
The Path Forward
As financial services organizations adjust to the new CFPB rule, integrating robust data management systems and ensuring seamless compliance will be crucial. Marketers should consider leveraging AI and data to enhance customer experience, reduce attrition, and acquire new clients—all while adhering to privacy regulations. With the right tools, strategies, and data infrastructure in place, financial institutions can successfully navigate this new era of customer control, turning compliance challenges into growth opportunities.
Beth Merle, Vice President, Enterprise Solutions for Data Axle, has over 30 years of experience supporting the financial services industry. Currently serving as Vice President of Enterprise Solutions, she has a proven track record of helping financial institutions craft and execute growth strategies that drive customer acquisition, retention, and deeper engagement. This content is made available for educational purposes only. The content should not be used as a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.