2024 Trends & Predictions: Digital Lending

Regulatory uncertainty regarding emerging loan products, the looming student loan crisis, and breakthroughs in artificial intelligence will shape the lending industry’s outlook, opportunities, and operations in 2024.  
 
What is a loan? Federal and state regulators don’t agree today. But upcoming answers to this question in 2024 will have a profound impact on five emerging financial products: early wage access; buy now, pay later; subscription lending; overdraft protection; and credit-building services. Digital banking strategists, vendors, and other players must be ready to innovate. 
 
The student loan crisis presents a turning point for digital banking strategists. The resumption of federal student loan payments is leading to a gloomy outlook for millions of borrowers and the FIs that benefit when they spend, save, invest, and borrow. For digital banking strategists, 2024 will demand a new approach to how FIs educate customers, help them build credit, and position them for the day when they seek to borrow.  
 
Generative AI makes innovators think…smaller. The C-suite is open to investing in artificial intelligence in lending. But because the technology is unproven for most consumer-facing applications, 2024 will be an important year to focus first on AI-powered tools that will eliminate grunt work and free up staffers for human-to-human interactions.