Industry Mega-Trends

We’ve seen a lot of consolidations happening in our industry, from lenders being bought and sold to public banking software firms taken private, there’s no shortage of sights and sounds that reshaped the banking and fintech industry.

Major retailers are discovering the benefit of fintech infrastructure companies for themselves and have launched their private labeled point of sale financing services replacing some of the biggest players in this space such as Klarna and Affirm.

We’ve also seen banks and credit unions shifting their technology platform from old and stodgy players such as nCino and MeridianLink to newer platforms that allows their clients to get approved for credit with more accuracy and details.

We’ve seen major shifts in attitude when it comes to open banking. With the open banking rules in the US going away, there is even more ambiguity on data ownership and liberalization of open banking data. The winners are clearly the banks and the losers are the likes of Plaid. 

And speaking of Plaid and banking data, we’ve seen a resurgence of scanning bank statements taking the main center stage again with the rising cost of opening bank data. With the advent of artificial intelligence, bank statements of any form can be scanned in with accuracy and speed replacing the need for Plaid and reducing overall cost.

Open Banking

Open banking data remains a mystery in 2025. We were all hoping that the new open banking rule would be passed by the CFPB but the Trump administration nixed it and completely killed the open banking rule. Perhaps a homage to the powerful banking lobbies such as JPMorgan Chase.

And speaking of JPMC, after the open banking rule has completely failed, they openly started asking for a hand out from Plaids of the world to pay for the access of their banking data. Plaid immediately caved and started paying JPMorgan Chase, otherwise their business is essentially dead.

All this means is that open banking data cost will get passed to banks and lenders that require this data and ultimately the consumer will bear the cost of this access. We don’t think anything will change in terms of Open Banking data access and lenders are asking platforms such as to scan bank statements to reduce the cost and avoid any other potential fallout from the Open Banking data access saga.

The scanning technology has grown leaps and bounds. Not only can we extract this data, we can use this information from the scanned document to make decisions. This process is cheaper, cleaner and most importantly faster than Plaid and other open banking access groups such as plaid. 

This information can also be sent directly to Pave or Prism for further processing, making it a seamless switch from Plaid.

Private Labeled BNPL

Every seven years or so, a new set of technology and strategies dominate the market. Pure-play BNPL players such as Affirm and Klarna have enjoyed their moment in the spotlight. However, major retailers have realized one thing, they can now do all of this themselves.

The biggest groundbreaking moment is that these pure-play BNPL lender’s technology have been completely commoditized and made it super affordable for retailers to set up their own BNPL products with minimal cost.

Lending licensing structures are also commodities at this point. Retailers can leverage technologies and retailer installment loan licensing structure to deploy their own BNPL product without hesitation.

The second biggest issue with pure-play BNPL lenders is that their interest is not and never will be aligned with the retailers. These lenders are all about credit risk and care very little about customer experience and what the retailers need, which is more sales.

When a retailer brings about one of these pure-play BNPL lenders, they have no clue what their agenda really is, or their approval rate or their way of manipulating the retailers into unfavorable merchant discount rates. 

This is ultimately a wake up call for retailers to start thinking about whether working with pure play lenders and being slaves to their terms and conditions is really the best way to operate their business. In 2025, we see massive movement into private label BNPL play and the BNPL technology and licensing structure has now been commoditized to power retailers world wide.

Monolithic Banking Software Coming to an End

The likes of nCino and MeridianLink’s market share is shrinking. MeridianLink has been taken private this year which marks a significant slowdown in their ability to win over clients.

The old days of building your bank around a piece of software is over. Newer players understand that banks need flexibility and their clients deserve better underwriting and better onboarding experience.

Banks also want better connectivity to marketing services to underwrite more opportunities. For example, the bigger players in the banking software space refuse to change their application process and forcing banks to use the same process across the board. This reduces the bank’s competitiveness and their ability to adjust for risk and pricing accordingly.

In other instances such as Auto Lending, these old LOS (Loan Originations Systems) refuse to play with DealerTrack and RouteOne with their newest APIs which will make the entire financing flow even more automated.

Credit Unions are finally waking up to the fact that working with traditional LOS platforms is a dead end and will not tolerate more waiting time as well as their inability to change, let alone the exorbitant amount of money they have to put up with. Their technology investment is and has always been negative. There’s simply no other choice, until now.

LendAPI is changing the way banks, credit unions and lenders make their choices. No longer will software dictate how banks and credit unions work, it’s the other way around. Any onboarding process, decisioning process can be changed and managed by the banks themselves in an efficient and compliant manner. We are turning the table upside down to give banks and credit unions their freedom to choice and freedom to create.

Credit Risk Modeling Run-Time Breakthroughs

Pure play decisioning technology that only has a decision engine is dying bread. Most of the banks, lenders and credit unions doesn’t care what type of decision engine there are, they just need to launch their latest machine learning algorithms and it has to work.

Credit Unions and banks care about one thing, flexibility, connectivity and speed. Their risk models and data scientists need variety to explore new ways to underwrite and expand their credit box. All of the current decision engine makers are rules based and have no clue on how t implement machine learning algorithm or work with data science or risk modeling tools. 

We’ve created self-serve tools for bank’s machine learning models to implement their models themselves, be it straight Python code or Sagemaker files, you  can point and click your way all the way to checking your models into production without any other third party intervention.

First, our technology frees up paying thousands of dollars of serving fees to these pure play decision engine makers and secondly you don’t have to wait for them to implement changes for you. 

In addition, you can experience hundreds of third party data providers which we’ve already integrated with. No longer are you constrained to just a handful of third parties for you to use when it comes to identity verification or credit underwriting. Most of all fan favorite third party data providers are in our LendAPI integrated partners panel. You can plug and play and start testing your latest underwriting and pricing strategies.

Speed is the most difficult part of being a world-class decision engine. Most of the decision engines on the market are single threaded design. It can’t handle the volume and complexity of a multi-treaded design. Whether there is a surge of demand from a marketing campaign or during peak time periods, most of the decision engines fall part which constraints fintechs, banks and credit unions design.

LendAPI processed over 100 million credit applications and can crank out millions of transactions daily. Because of our technology architecture, we can handle traffic for the biggest fintech and banks on the planet. 

The Age of Instant Launch is Here

Vibe coding changed everything in 2025. With the help of A.I., wannabe programmers are showing up everywhere and it’s helping the A.I. bubble to grow into a new stratosphere. Banking and Fintech is not immune to this new phenomenon. 

Whether the authors of these new vibe codes understand banking, lending, risk management and compliance, that’s clearly visible in the “problems” that they are trying to solve. Most of these new companies, platforms, applications fueled by A.I. investment lacks basic understanding of how banking and lending works and it creates a dangerous precedent for bad bankers to start using these platforms which will amplify all sorts of issues ahead.

What is clearly a trend in 2025 is that decision makers of banks and fintechs’s expectations have shifted when it comes to how long it might take to launch a new program. Systems and platforms such as ours are expected to take ideas into production within days and not years.

For instance, a credit union service organization (CUSO) approached us with a clear agenda. Can we launch a payroll deduction personal loans program for their credit union’s SEGs (select employee groups) in 3 years.

We were first, confused by the task. Not because of the technological capabilities of our platform, but rather at the time and cost this CUSO they stated as the basic requirements. We launched their product into production within six months.

The capabilities of lending and banking platforms of yesteryear are no longer meeting the demand of today’s banking and financial service companies' plans. LendAPI is completely changing the way we launch new products.

2026 and Beyond

We’ve already heard from President Trump that he wants to cut credit card interest rate to 10% for a year. This presidential directive will carry through our industry for years to come. Banks and lending institutions will have to augment their credit card offerings and slash their approval rate by more than half.

This puts an additional strain on the entire loan origination system. For banks to keep on originating, it must look for a better platform to underwrite and understand clients. They need to be more careful when it comes to underwriting their potential clients because their room for error has been reduced exponentially.

Many banks will shift their focus on point of sale financing or working with their merchants and retailers to set up installment loans to make up for the loss in business on the credit card side. We’ve already seen credit card based fintechs going out of business because of this pressure in reduction in originations and thinner margin to cover their costs and expenses.

Rewards based credit card fintechs such as BILT has essentially shut its doors because they no longer can afford to pass on margins to their clients in the forms of points and cash rebates.

One thing for sure, 2026 will bring about more changes as we come to a critical election cycle that will see more market reforms that will have wide impacts for some times to come.

About LendAPI

LendAPI is a high-speed, cloud-based digital banking and lending infrastructure provider designed to empower financial institutions to launch products at the speed of thought. Headquartered in Irvine, California, and backed by leading venture capital firms (including Techstars and AlleyCorp), we are redefining the "Bank-in-a-Box" category.

Our mission is to democratize fintech innovation by providing a secure, data-driven platform that streamlines compliance, onboarding, fraud detection, and credit risk management. By 2026, LendAPI has surpassed the milestone of 100 million credit applications processed, cementing its position as the backbone of modern digital credit for banks, credit unions, and fintechs globally.