For banks, lenders and financial institutions looking to stay ahead in lending in 2026.

As we approach 2026, the lending landscape is undergoing a meaningful shift. Not just incremental change – but a re-shaping of how loans are originated, underwritten, delivered and embedded across consumer, SMB and B2B channels. For banks and lenders (and the fintech platforms powering them) this is a pivotal year: the winners will be those who move from theory to operational execution.

Below are six major trends we expect to define lending in 2026 – and what they mean in practice for banks and lenders.

1. AI-Powered Lending: From “nice-to-have” to core engine

AI is no longer a futuristic buzzword in lending – it’s becoming the backbone of how customers discover and access their financing options, loans are originated, credit decisions are made, risks are managed and experiences are delivered.

Here’s how this trend is evolving for 2026:

• Agentic AI lending will fundamentally change how customers find, interact with and borrow from banks.
  
• Lenders are increasingly using alternative data and AI for faster, more inclusive credit decisions. For example, fintech lenders now leverage non-traditional data sources (transactions, behavior, subscriptions) to widen access.
  
• Generative AI and advanced machine-learning models are being applied to tasks such as underwriting, fraud detection, and servicing workflows.
  
• The focus is shifting toward explainable AI, governance and operational integration. As AI moves into core operations, regulators and risk teams will demand transparency and compliance in how models make decisions.

For banks and lenders this means becoming AI-ready by ensuring:

• Interoperability: Systems must be capable of secure, real-time communication with external AI agents.
  
• Data Access & Governance: Banks must ensure their data models are structured and permissioned for automated agent interactions.
  
• AI Identity & Authentication: New standards will be needed to recognize and validate trusted AI agents acting on behalf of customers.

From a market perspective, one report predicts the “doors to innovation and strategic growth are wide open” thanks to the combination of embedded finance and AI in lending.

2. Customization & Personalization of Credit Experiences

One-size-fits-all lending is ending. Borrowers expect financing that fits their life, business or purchase – and lenders that deliver it will stand out.

• Customization spans product type, term, amount, repayment cadence), pricing (risk-based pricing, dynamic pricing) and embedded UI/UX (instant decision, mobile channel, seamless onboarding).
  
• Consumer and SME borrowers expect more flexibility e.g. repay later, change schedules, tie financing to purchase behavior.
  
• For banks/fintechs this means leveraging modular platforms and/or lending orchestration layers so you can dynamically tailor offers.
  
• The advantage? Higher conversion, better retention and more meaningful engagement.
  

In short: the “product” becomes less about a generic loan and more about a tailored financing experience.

3. Rise of Digital-Owned Channels & Customer Journey Innovation

The channel through which lending is delivered is shifting strongly toward digital-first and digital-owned experiences.

Key signals:

• The expectation of fast, frictionless online loan origination is now table stakes – from both consumer and SME borrowers. Combined with AI decisioning this supports near-instant fulfilment.
  
• Digital channels are increasingly integrated with core banking, credit decisioning, servicing platforms and analytics. The whole journey is being digitized end-to-end.
  
• For banks and lenders, the imperative is to transform the digital origination layer, streamline back-office workflows and reduce operational cost while improving customer experience.
  
• Banks are increasingly seeking to digitize their lending journeys via their owned digital channels, such as their bank app (to lend to existing customers) and bank website (to lend to new customers).
  

4. Embedded Lending: Lending Where the Need Arises

Embedded lending (the ability to offer financing at the moment and place the customer needs it) is accelerating. For 2026 this becomes a major strategic frontier.

• Non-financial platforms (merchants, marketplaces, SaaS platforms) are embedding financing offers directly into purchase flows or business workflows.
  
• Reports highlight that embedded finance is gaining traction in B2B and SME segments.
  
• For lenders and banks, embedded lending offers an opportunity to reach borrowers before they shop the market, capture loan volume via partnerships and generate richer data on origination context.
  
• For merchants and platforms it means being able to offer financing as part of the product experience – improving conversion, AOV (average order value) and customer loyalty.
  
• To succeed you need an orchestration layer (APIs, decisioning, funding), partner ecosystem and modular product models.
  

5. B2B Lending & SMB Finance: The Next Growth Frontier

While much of fintech’s “buzz” has focused on consumer lending, 2026 will mark a shift: growth in B2B and SMB financing becomes one of the largest opportunities.

• Platforms and analytics previously used in consumer lending are being adapted for SMB and mid-market credit.
  
• Things like invoice financing, embedded installment loans, and real-time working capital workflows are becoming central to B2B purchasing flows and order systems.
  
• For banks and lenders: unlocking this segment means adapting underwriting for business risk (cash flows, supply-chain exposures), integrating with enterprise workflows and reducing friction for small business borrowers.
  

6. Orchestration: The Backbone of Modern Lending Architecture

If lending in 2026 is to be agile, modular and integrated, then orchestration becomes the secret sauce.

• Lending orchestration refers to how the lending process is built as a set of configurable modular components (origination, decisioning, pricing, servicing) that can be orchestrated dynamically via APIs and rules.
  
• This architecture allows banks/fintechs to launch new products faster, plug into partner flows (embedded), vary pricing/offers, route decisions and integrate new data sources.
  
• For financial services companies, the shift means extending or adapting from monolithic legacy loan systems towards configurable “lending platforms” or orchestration layers.
  
• For banks, that means either building the orchestration layer themselves, partnering or buying best-in-class platforms.
  

Bringing It All Together: Strategy & Action Plan for 2026

Here’s a simple blueprint you can apply as a bank, lender or financial institution:

1. Map your current state – inventory your origination, underwriting, servicing flows, data sources, partner channels and technology stack.
   
2. Define your target state – choose the combination of these trends where you want to lead (for example: embedded SMB financing + AI decisioning + orchestration).
   
3. Prioritize use cases – pick one or two high-impact opportunities (e.g. embedded lending at consumer checkout, digital lending to SMBs via your bank app, etc.) .
   
4. Source a partner or build the foundation – invest in data infrastructure, model governance, APIs/partners, modular stack. Without the plumbing the use cases will stall.
   
5. Measure & iterate – monitor conversion, cost to serve, risk outcomes, cross-sell/upsell impact; adjust dynamically.
   
6. Embed culture change – this isn’t just tech. Lending teams, risk, IT and business must shift to faster cycles, partner-first mindset and value-based product thinking.
   

Why 2026 Matters

• Borrower expectations have shifted: they expect speed, personalization, embedded experiences.
  
• Competition is intensifying: fintechs, niches, non-banks plus non-financial platforms are all vying for credit flow.
  
• Cost pressures and margin compression mean banks/lenders cannot just rely on scale—they need agility, differentiation and closer ties to digital ecosystems.
  
• Regulation and risk are increasing: as AI and embedded finance scale, governance, model risk and compliance will be front and center.
  
• Finally, the ecosystem is aligning: more APIs, more platforms, more demand from non-traditional originators (AI agents, marketplaces, SaaS platforms, B2B networks). The infrastructure play is ready.
  

Final Thoughts

If you’re at a bank or lender, the question is no longer if you should adopt these trends – it’s how fast and how well you can adapt and innovate.