Data is the new customer key

Data portability and ownership. Sounds dry, right? Think again. In the world of finance, these regulatory mandates are actually the dynamite that’s blowing up the traditional bank-customer power structure.

For decades, banks held a near-monopoly on your financial life, sitting on your data like a dragon on a hoard of gold. Now, thanks to aggressive regulatory action in the UK and a game-changing push in the US, the customer has been handed the key to the vault.

For every financial institution and ambitious fintech, this is more than a compliance headache. It’s a high-stakes, competitive fight for the future of the customer relationship.

UK & EU: The Open Finance Revolution

In the UK, the data revolution is already mature, built on the back of the EU’s GDPR and the subsequent Open Banking initiative.

At its core, GDPR gave the consumer a fundamental Right to Data Portability. But the UK turned that right into an economic engine. Open Banking mandated that major financial institutions provide access to customer data (with consent, of course) via secure, standardized APIs.

The result speaks for itself: Open Banking is no longer a pilot project; it’s a colossal piece of infrastructure. The ecosystem has recorded a staggering 2 billion API calls and serves over 15 million users. This wasn’t just about moving money; it was about shifting power, fueling new services from budgeting apps to smarter lending tools.

Now, the focus is shifting to Open Finance. The Financial Conduct Authority (FCA) is extending this principle far beyond current accounts—think mortgages, pensions, investments, and insurance. The aim? To unleash a “smart data revolution” that forces the entire sector to offer truly hyper-personalized, customer-centric products.

Simultaneously, for any firm using critical third-party tech, the EU’s new Digital Operational Resilience Act (DORA) and the Data Act are tightening the screws. They demand that firms not only survive a cyber-attack but can also seamlessly port their data and applications if they need to switch critical cloud providers. It’s a dual mandate: be open to the customer, but be resilient with your tech.

The US Awakens: Section 1033 is Coming

The US is playing catch-up, but the move will be swift and decisive. The key driver is the Consumer Financial Protection Bureau (CFPB) proposal to implement Section 1033 of the Consumer Financial Protection Act.

In short, this rule mandates that banks and financial companies must provide consumers with access to their financial data—including account balances, payment history, and loan terms—in a secure, usable format. Furthermore, they must give the consumer the ability to share that data with a third party.

This is the American equivalent of the UK’s Open Banking mandate. It’s designed to dismantle the informational advantage held by incumbent banks, allowing fintechs to pitch for business with the same depth of data a consumer’s current bank has. Just as mandated telephone number portability drove down phone plan prices years ago, financial data portability is expected to turbocharge competition and drop consumer costs.

Why This is a Gold Rush for Fintech

For the innovative fintech player, mandated portability is a golden ticket:

1. Lowered Friction, Higher Conversion: New financial providers no longer need to rely on cumbersome manual uploads or screen-scraping to onboard a customer. A seamless, API-driven data transfer means lower customer drop-off and faster conversion rates.
2. Unlocking Latent Value: When a customer consents to sharing their entire financial picture—not just their spending account but their investments and savings too—the value of that data explodes. It enables lenders to provide better rates, advisors to offer true holistic financial planning, and payments firms to develop more dynamic products.
3. The Hyper-Personalization Engine: The future of competitive finance isn’t about having the best product; it’s about having the best understanding of the customer. Portability provides the rich, cross-institutional data required to deliver the hyper-personalized services that customers increasingly expect.

The message is clear: For financial institutions, compliance is the price of entry. For fintechs, strategic adoption of these new data rights is the pathway to market dominance. The war for the customer is now a war over who can most effectively, and securely, leverage the customer’s own data.

How ready are you leverage, not just comply with the massive shift in data ownership?