The 2025 Lending Landscape and Emerging Opportunities
Financial institutions are going through 2025 with cautious optimism.
Inflation is easing, interest rates may fall, unemployment remains low … while these trends point to a favorable lending environment – uncertainty still looms.
The new administration introduced significant policy changes, including tariffs, deregulation, and tax reform proposals. New tariffs have been announced, some implemented, and others pending. If they stick, these are expected to raise inflation modestly. U.S. consumer debt is high and climbing – already at $17.94 trillion. Yet, there’s opportunity in potential rate cuts and consumer demand.
Loan Growth Is Back on the Table
Mortgage originations are expected to increase by 28% this year with small financial institution portfolios expected to increase 5.8%. Meanwhile, credit card growth is surging, with 43% of U.S. consumers opening a new credit card account in 2024 – an unprecedented increase.
To capitalize, your lending systems must evolve.
Modern Lending Demands a Digital-First Strategy
To compete in this environment, you must modernize how you originate, process, and service loans – creating an efficient, personalized, and data-driven experience across the full lifecycle.
Several strategic technologies are driving this transformation, including:
- Open banking/finance: Enables real-time visibility into income, spending, and liabilities – improving risk assessment and creating richer, faster borrower profiles.
- Data analytics: Powers smarter decision-making, personalization, and operational agility across origination and servicing.
- AI: Unlocks scalability, reduces manual work, improves underwriting, and helps spot fraud and opportunities earlier.
Together, these tools are transforming lending into a seamless, digital journey that’s faster, more intelligent, and borrower centric.
Five Lending Strategies to Help You Stay Ahead
- Leverage open banking/finance: With 43% of financial institutions planning to adopt open finance, lending is a natural use case. Permissioned data and cash flow insights enhance credit models – offering faster decisions and deeper borrower understanding.
- Extend short-term financing: Cash flow data assists with identifying the need for short-term financing for both consumers and small businesses – meeting needs in financial crunch moments and building stronger, stickier relationships.
- Personalize the experience: Use open finance data to verify income, analyze behavior, and tailor your offerings with speed and transparency. Real-time insights support better risk decisions and enhance your accountholder experience.
- Make data central: Integrate diverse data sources to create a real-time borrower snapshot and enable more accurate credit decisions, better risk assessments, and adaptive lending strategies that reflect current financial health – not outdated models.
- Prepare for AI: AI offers real gains in productivity, underwriting, and document processing, but you must get your data strategy in order first. Collaboration with trusted AI vendors can accelerate this transformation while maintaining regulatory confidence.
Lending Is Advancing … Don’t Get Left Behind
Automation, data, open finance, and AI are transforming how financial institutions lend.
Most banks and credit unions are already investing, with a focus on automated workflows, AI-powered underwriting, and intelligent document processing and management over the next two years.
Lending isn’t just evolving – it’s accelerating. Now is the time to modernize.
Unlock extended insights into lending and other top priorities for banks and credit unions over the next two years by downloading our 2025 Strategy Benchmark.
.svg)
