Key Trends Shaping The Future of Lending in 2026
By embracing digital solutions that enhance agility and responsiveness, lenders can secure a competitive advantage in a volatile environment, writes Andrew Bateman, executive vice president of the lending business unit at Finastra, in his opinion piece for finews.asia.
Technology is no longer just a support function; it's emerging as a primary differentiator in an increasingly complex and competitive global market. With this in mind, three technology trends set to define the future of lending are: digital transformation, AI adoption and ecosystem development.
1. Accelerating Digital Transformation
Technology offers a vital path through economic uncertainty, yet many financial institutions remain constrained by legacy infrastructure. Outdated systems are among the most significant barriers for banks looking to adopt AI, advanced data analytics, and other innovations that could unlock competitive advantage.
In trade finance – a sector traditionally slow to embrace new technology – the shift from monolithic solutions to cloud-native, modular platforms marks a significant evolution.
Importantly, transformation doesn’t require risky «rip and replace» strategies. A phased approach, where next-generation solutions are deployed alongside existing infrastructure, enables institutions to modernize sustainability while minimizing disruption and maintaining operational continuity.
Cloud-first models are now central to modern lending technology strategies. By transitioning to fully managed cloud environments, banks can benefit from end-to-end technology services – allowing them to focus on business outcomes rather than operational overhead. These models offer unparalleled scalability, flexibility, and deployment speed, making them ideal for institutions prioritizing agility and innovation.
Perhaps the most visible benefit of digital transformation is on customer experience. Digital self-service portals and mobile interfaces enhance transparency and reduce the frustrations often associated with traditional lending processes. By placing the customer at the center of the experience, banks can build long-term trust and loyalty. And, as these digital foundations strengthen, they create the perfect environment for the next frontier in lending technology: artificial intelligence.
2. Harnessing AI For Operational Efficiency and Better Customer Experiences
With digital foundations established, financial institutions are increasingly turning to artificial intelligence as the next frontier in lending innovation. However, a fundamental challenge remains: data quality and structure. Without well-organised, standardised data, even the most advanced AI tools will fall short. This underscores the ongoing need to harmonise the vast and varied datasets that underpin the lending ecosystem.
AI offers the potential to revolutionize credit assessment by enabling more holistic evaluations. Rather than relying solely on traditional metrics like historical financial data and collateral, AI-powered analytics can incorporate alternative data sources to build a richer, more accurate picture of creditworthiness. This is particularly valuable for smaller businesses that may lack extensive credit histories. Personalization is also emerging as a key differentiator, with banks and fintechs tailoring lending solutions to match the unique cash flow patterns and operational needs of individual clients.
In trade finance, AI can help bridge a growing knowledge gap as experienced professionals retire and regulatory complexity increases. This is an area where AI-powered assistants can deliver significant value by providing banking staff with accurate, real-time, and context-aware assistance. These tools help users to navigate documentation, fraud detection, and compliance with greater ease and accuracy. These tools simplify traditionally complex processes, reducing reliance on specialized experience.
By automating repetitive tasks, AI is set to enhance productivity while freeing staff to focus on relationship-building and revenue-generating activities. Advanced machine learning models will improve credit risk assessment and fraud detection with unprecedented precision, while real-time analytics will empower banks to respond dynamically to customer needs.
To fully unlock AI’s potential, financial institutions must embed it into core operations – not as a bolt-on but as a fundamental component in their lending infrastructure. This requires a culture of innovation, a commitment to data excellence, and a strategic approach to integration.
3. Building Ecosystems and Partnerships For Future-Ready Lending
While internal innovation remains essential, the future of lending will be shaped by collaboration beyond organizational boundaries. To remain competitive, financial institutions must embrace an ecosystem mindset, partnering across the industry to integrate digital solutions and data flows with core lending platforms. This approach lays the foundation for sustained innovation, agility, and growth.
As other financial sectors rapidly advance, lending must accelerate its technological evolution. While asset classes like cash, deposits and bonds have already embraced digitization and tokenization, many lending operations lag. Without modernizing and the adoption of technologies like blockchain, lenders risk losing sponsors and borrowers to more efficient, tech-enabled markets. In trade finance, especially, blockchain platforms are poised to revolutionize traditional processes, creating unprecedented speed, efficiency, and transparency.
Thriving in this collaborative environment requires more than just technological investment – it demands investment in human capital. As AI becomes embedded in lending operations, institutions must develop the skills to manage, supervise, and collaborate with intelligent systems. Building future-ready teams is just as critical as building future-ready tech.
By fostering both technological partnerships and cultivating talent, forward-thinking lenders can create resilient, adaptive ecosystems – ready not just for 2026, but for the long-term future of lending.
Andrew Bateman is responsible for the leadership and growth of Finastra’s Lending Business Unit. With almost 30 years in financial services, he guides global teams in modernizing technologies through technical agility, supporting customers’ growth agendas. Previously, he has held positions across the globe with FIS and SunGard (later acquired by FIS). His career in financial technology began at Rolls-Royce, where the implementation of a new treasury system led to a role at GIS/KPMG Information Solutions (later acquired by SunGard). His path has seen him live and work in Asia, South America, the US, and the UK. He holds a Bachelor’s degree in Physics from the University of Nottingham and also has qualifications from the Association of Corporate Treasurers.
