2025: The Year of the Borrower – A New Era in Lending

2025 is predicted to be a transformative year in lending, marked by the CFPB’s Rule 1033 finalization going into effect in January. This regulation grants borrowers unprecedented control over their financial data, shifting the balance of power in lending. Traditionally, financial institutions controlled how and when borrowers could access their information. With Rule 1033, borrowers now have the legal right to access and share their data with anyone. While this is not that revolutionary, it’s the inverse control that will take the lending world by storm. Consumers have the ability to not only rescind access at any time but to require it to be deleted almost on demand; this empowers them to work with third-party providers, compare financial products, and seek out tailored borrowing experiences like never before. 

This flexibility fosters a competitive, customer-centric marketplace, ensuring that providers prioritize innovation and transparency. Borrowers benefit from more choices, security-backed data sharing, and greater decision-making power. This also puts the spotlight on customer experience, the likes of which have not been seen for decades. If the borrower has the ultimate control of their data from application to collections, lenders will be forced to step up their customer service to keep the borrower happily sharing their data. Gone are the days of hook them and book them. 

Lenders will need more than just a pretty offer to keep borrowers past the initial loan application, as it will be all too easy for them to get fished by a competitor with flashier fins, taking all their data with them. This also means the font of consumer information for data analytics could dry up very quickly without continued intervention. 

Redefining the Lending Landscape

This regulatory milestone shifts lending toward borrower-centric practices in drastic comparison to what we have seen in the past. With data ownership squarely in the hands of the borrower the industry will be forced to flex hard into usability to keep up. Borrowers can now compare offers with crystal clarity, pushing financial institutions and lenders to enhance their products and services to meet demands for transparency, customization, and security. You can expect 2025 to see frequent innovative solutions focused on improving borrower experience, process approachability and elevated standards for privacy and tailored service. Support, reduced friction and optimized onboarding experience will take center stage as lenders compete for borrowers’ data. 

While competition for borrowers is not a new concept to lending, maintaining that relationship to keep the borrowers’ data is now both paramount and virtually unprecedented. Hidden support phone numbers, long call queues, and chat bots will go the way of the mullet haircut with little hope of an ironic revival. As the market collectively gasps in horror at this redirection of motivation, we foresee a ripple effect happening throughout consumer services. He who embraces the customer experience and engages the relationship gets the gold. Will the good old days of “customer is king” reign again? All trends point to yes, and why shouldn’t it?