As 2026 approaches, the European consumer lending market is poised for significant growth and transformation. By late 2025, total outstanding consumer credit in the euro area is set to have surpassed €800 billion, highlighting both the scale and stability of the market.
At the same time, customer expectations are shifting: speed, transparency, and seamless digital experiences are now table stakes. Quentin Barria, Head of Sales at Brite Payments, sums up this shift:
“More than half of Gen Z in Germany now prefer an account-to-account for online purchases – which is a clear signal of where the market is and that Brite is well positioned to meet the shift.”
For lenders, this means instant payouts, smarter data-driven decisions, and frictionless account verification are no longer optional: they’re central to attracting and retaining customers in a competitive landscape.
In this environment, regulatory reforms, open banking innovations, and AI-powered tools are converging to reshape how loans are assessed, disbursed, and personalised. Lenders who can combine compliance, speed, and customer-centric technology will set the standard for the next generation of consumer lending.
We’ll explore five key trends shaping consumer lending in 2026 and how they’re redefining the borrower experience, enabling smarter lending decisions, and creating new opportunities for lenders to compete and grow in an increasingly digital, real-time market.
1. Higher expectations for fast payouts for consumer lending
The rise of the instant economy has reshaped what consumers view as an acceptable speed for financial transactions. It’s no longer just payments that need to move in real time: payouts are now expected to be just as fast. From refunds and insurance claims to earned wage access (EWA) and loan disbursements, waiting several days for funds increasingly feels outdated.
This demand for immediacy is placing new pressure on lenders. Borrowers – especially those seeking short-term or emergency credit – expect funds to be deposited into their accounts within minutes, not hours or days. Faster disbursements have become a core part of the customer experience and a key differentiator in a fiercely competitive lending market.
Across Europe, and particularly in Germany, the ecosystem is evolving quickly. High adoption of SEPA Instant and real-time payment rails is enabling lenders and fintechs to streamline their payout processes and eliminate bottlenecks.
Consumer behaviour is also reinforcing this momentum: three in four (75%) German users who have tried Pay by Bank say they intend to use it again, signalling strong appetite for faster, more seamless account-to-account payment experiences.
As more financial service providers embrace instant payout technology, they’re finding that speed doesn’t just improve satisfaction: it reduces churn, increases reinvestment, and strengthens long-term loyalty. For lenders, instant payouts are no longer a ‘nice to have.’ They’re becoming a strategic necessity.
By leveraging solutions such as Brite Payments Instant Payouts, institutions can automate disbursements, minimise manual work, and deliver the immediacy consumers now expect. In a market defined by convenience and responsiveness, lenders prioritising instant loans and same-day settlements will stand out in 2026.
2. New EU directives and UK rules look to modernise markets
Regulators across Europe and the UK are modernising the consumer lending landscape to keep pace with digital innovation and new credit products. In 2026, these reforms will shape how lenders design products, assess risk, and interact with consumers.
In the EU, the Consumer Credit Directive 2 (CCD2), effective November 2026, expands the scope of regulated loans to include:
- Microloans
- Interest-free credit
- Buy Now, Pay Later (BNPL)
- Short-term credit
The CCD2 strengthens consumer protection with standardised disclosures, digital-first contracting, stricter creditworthiness checks, and safeguards for automated decisions. Lenders must also offer leniency measures before enforcement, ensuring fair treatment for borrowers.
In the UK, reforms aim to replace the fragmented Consumer Credit Act with a principles-based, outcomes-focused regime. The new framework simplifies disclosure and modification rules, supports innovation in digital lending, and keeps consumer protection central through FCA oversight. It’s a regime designed to be more flexible, innovation-friendly, and digitally compatible – while ensuring fairness and transparency for borrowers.
These reforms reflect a common theme: regulators want to protect consumers, support responsible lending, and foster innovation.
For lenders, 2026 will be a pivotal year to adapt products, update compliance procedures, and invest in technology that aligns with both EU and UK rules. Cross-border lenders, in particular, will need to navigate divergences between EU member states and the UK to maintain compliance and ensure a seamless customer experience.
3. Open finance and data-driven KYC transform lending
Open finance is transforming consumer lending by enabling lenders to access broader, consent-based financial data. Building on open banking’s foundations, open finance extends secure data sharing to loans, mortgages, insurance, pensions, and investments, giving lenders a more complete picture of a customer’s financial situation.
Central to this transformation are account information services (AIS) and the emerging financial information service providers (FISPs). These services consolidate and securely share real-time financial data, allowing lenders to:
- Enrich Know-Your-Customer (KYC) checks: Beyond basic identity verification, lenders can now validate income, spending patterns, and financial commitments.
- Assess affordability accurately: Access to real account data reduces reliance on self-reported or outdated information.
- Enhance risk and compliance procedures: Real-time insights enable better fraud detection, anti-money laundering checks, and credit risk assessment.
For consumers, open finance gives more control over their data, ensuring that sharing is transparent, secure, and revocable at any time. For lenders, it supports faster onboarding, more informed lending decisions, and highly personalised offers while maintaining regulatory compliance.
In the EU, proposals like the Financial Data Access (FIDA) and the continued rollout of open banking in the UK are laying the legal and technical foundations for these capabilities, making enriched KYC both feasible and standard practice.
In 2026, open finance will allow lenders to combine richer financial data with automated KYC processes, improving accuracy, reducing friction, and enabling safer, faster, and more personalised lending experiences.
4. Further development of AI for risk and compliance
AI is increasingly central to consumer lending – especially for managing high volumes of smaller loans. By analysing a combination of credit history, cash flow, and other financial indicators, AI enables faster, more accurate risk assessments while reducing operational overhead.
When combined with open finance or other data solutions, AI can deliver even smarter insights, predicting default risk, detecting fraud, and identifying customers who may benefit from personalised loan offers. This integration allows lenders to make data-driven decisions at scale, improve compliance with regulatory standards, and offer safer, fairer lending.
Lenders adopting AI-powered risk models and advanced data analytics in 2026 will be able to underwrite loans more efficiently, reduce operational costs, and enhance both customer trust and regulatory compliance – all while enabling more personalised, accessible lending products.
5. Hyper-personalisation in consumer loans
Hyper-personalisation is often touted as the next big trend in banking. In theory, it uses AI and data analytics to deliver tailored financial products and communications based on a customer’s behaviour, preferences, and life stage. For example, it could anticipate a cashflow crunch or offer targeted credit based on real-time insights.
In practice, however, adoption is still limited. Reports suggest that while most banks run some personalised campaigns, fewer than half leverage enterprise-wide customer data effectively or provide truly predictive and actionable insights. Achieving hyper-personalisation at scale requires not just sophisticated AI, but deep KYC, integrated data platforms, and cultural shifts toward customer-centricity – all of which remain challenging for many institutions.
For now, hyper-personalisation is more a vision than a reality. While it promises enhanced customer experiences and smarter lending decisions, banks should be wary of overhyping capabilities they can’t yet deliver. The key takeaway for 2026: focus on building the foundations – robust data management, strong KYC, and AI-driven decisioning – before attempting fully personalised offerings.
Looking ahead: The future of consumer lending trends
As 2026 approaches, consumer lending is entering a period of transformation. Open banking and AIS are giving lenders faster, more accurate access to real-time financial data, while EU and UK regulatory reforms ensure innovation remains balanced with transparency and consumer protection.
AI is set to play a central role, streamlining underwriting for high-volume and smaller loans, improving risk modelling, and supporting compliance. Hyper-personalisation remains an ambition rather than a reality: while customers expect tailored, real-time insights, few institutions can deliver at scale. Success will hinge on combining rich customer data, strong KYC, predictive analytics, and human oversight.
The opportunities are clear: smarter lending decisions, streamlined onboarding, and flexible offerings like BNPL can redefine the customer experience. In 2026, the lenders who combine technology, compliance, and customer trust will set the standard for the future of consumer lending.
Conclusion
If you would like to learn more about how open banking benefits consumer lending, download our explainer below. Or, if you would like to learn more about Brite Payments’ various solutions, don’t hesitate to get in touch with our payment experts today.
