2025 Digital Lending Trends

The pressure will mount in 2025 for traditional lenders and the vendors that serve them to make foundational strides in using digital channels to win share of mind that leads to share of wallet, apply artificial intelligence even at smaller FIs, and outmaneuver bruised but clever fintechs. 

Digital advice will differentiate lenders as interest rates slide. Falling interest rates will leave prospective borrowers with lots of questions about their ability to borrow prudently—but generic answers will miss the mark with consumers who want digital lenders to deliver one-to-one advice and recommendations. 

The AI gap in lending will put smaller FIs at risk. Because only the largest players have the resources to blaze a trail in AI-assisted lending, the gap is widening between the haves and the have-nots. In 2025, the onus will be on vendors to lead the way by developing AI applications and equipping clients to start small but think big about AI’s future. 

Fintechs will excel at ‘lending without loans.’ The Consumer Financial Protection Bureau set back fintechs specializing in earned wage access, giving traditional lenders a narrow window to rethink and retool to counter innovative fintechs that will still find a way to lend without making what regulators call loans.