It’s not just for fintechs and credit bureaus.

Equal credit access rules weren’t designed for modern underwriting technology.

UK neobank Monzo has agreed to acquire online mortgage broker Habito as it expands its homeownership features—including tracking and brokering home loans—in its app. Neobank super apps create unique banking journeys that engage customers based on different needs as their financial lives progress. With an integrated mortgage broker, Monzo ties together its home insurance product and mortgage-tracking feature—and could debut a direct mortgage product in the future.

Amazon has partnered with the fintech Slope to offer AI-underwritten financing to Amazon sellers and reduce friction in the lending process. Eligible US Amazon merchants will be able to apply for and access loans through their seller accounts. Amazon could position itself as the go-to platform for higher-volume sellers as well as a more sophisticated alternative to financial institutions—and compete aggressively based on accuracy of underwriting and the time between applications and loan funding. It is the wise move for banks to move into embedded lending for ecommerce rather than try to sell loans to these merchants directly.

UK digital bank Starling is exploring an acquisition of another UK lender, per the Financial Times—in addition to a US bank. The move could help it expand quickly into corporate lending. Starling is not the only foreign neobank with US plans. Revolut, which competes with Starling globally, has held talks with investment bankers about buying a bank to secure a US license. Brazil’s Nubank applied for a US bank charter in October. But barriers to entry are rising as US challenger banks mature. Given the challenges ahead, quickly growing its loan book will be crucial to Starling’s profit plans.

Consumer loan volume and credit risk are getting harder to gauge as lending moves away from banks and into alternative consumer lending. One estimate says that private funding for consumer lending fintechs could support almost $140 billion in global lending over several years. FIs’ general disinterest in riskier borrowers means that they migrate to fintechs, which may retain the risk or shift it to banks and investors in ways that reveal little about borrowers on the hook for repayment. If the trend continues, widespread defaults could hit the financial system, and few will know exactly what to expect.

The share of rental applicants who are more than 90 days delinquent on student loans increased from 15% in January 2025 to 32% in May, according to a just-released TransUnion report. Credit score data reflects these delinquencies, with lower-scoring consumers faring the worst. Consumers’ struggles with student loan repayments highlight a problem for financial institutions (FIs) on the hook for private-loan defaults. And as consumers delay expensive financial decisions like buying a house in favor of reducing student loan debt, demand for credit like mortgages and auto loans will suffer.

Wealthfront, a roboadvisory wealth tech, announced Wealthfront Home Lending, a mortgage platform for purchase loans and refinancing. It will offer fixed- and adjustable-rate conventional and jumbo loans up to $5 million. Wealthfront Home Lending will for now be an incremental revenue source. But it threatens banks’ mortgage business by accelerating growth in digital mortgage companies. Online lenders like Rocket Mortgage already compete in the space on customer convenience, digital experience, and mortgage rates. Banks will struggle to catch up.

FICO has partnered with Plaid to incorporate cash flow data from consumers’ checking, savings, and money-market accounts into its UltraFICO Score. The updated scoring model is designed to give lenders a more comprehensive view of a customer’s creditworthiness than legacy credit files indicate. Consumers who have credit products can access more, but those who don’t are less likely to be approved. Yet in a short time, scoring has evolved to better reflect consumers’ everyday financial behaviors and their willingness and ability to pay. This should get more credit products into more consumers’ hands.

The news: After a five-year hiatus, JPMorgan Chase will once again offer HELOC loans, per Banking Dive. Why this matters: HELOCs tend to be a more flexible type of loan and often don’t have minimum loan requirements, per Mortgage Note. In a period when many customers are in need of fast, flexible cash, HELOC loans can help banks deliver. Not all banks that offered HELOCs pre-pandemic have relaunched them. But they should consider it: Banking customers are likely to continue feeling uncertainty about the economy and their financial futures in the medium term, and financial institutions that offer easier cash access to homeowners will reap more profits and customer satisfaction.

The news: Cogent Bank, a Florida-based community bank, is expanding its focus on a niche type of commercial real estate (CRE) financing—single-tenant net lease (STNL) properties—per American Banker. It created a new division and hired a former Bank OZK executive with over a decade of experience in this area to lead the charge. Our take: This strategy has offered smaller banks in particular a way to profit on CRE loans. While some community banks might hesitate due to lower yields compared to other loan types, the strong credit performance of STNL loans makes them incredibly attractive. But if a single tenant defaults or goes bankrupt, the lender faces a vacant asset and the burden of finding a new tenant. This can be particularly challenging if the property is highly specialized or difficult to repurpose. Furthermore, a nationwide focus requires a higher level of operational and underwriting expertise, which can strain a community bank's resources and force it into a highly focused corner.

The news: FundCanna launched B2B buy now, pay later (BNPL) platform ReadyPaid to address the cannabis industry’s endemic cash-flow problem. Our take: Alternative financing pairing well with an alternative industry comes as no shock. If cannabis is finally descheduled by the federal government—or at least reclassified, as President Donald Trump has considered—ReadyPaid will have a harder time competing against traditional banks that likely will openly service weed-related business without regulatory threats.

The strategy: Tech platform Bluwhale has released a model for a scoring system that calculates real-time credit signals from both fiat and crypto assets, per Cointelegraph. Why this matters: We called for FIs to consider incorporating crypto assets into lending products in our report “Home Lending Trends 2025.” Here’s why: Cryptocurrency is becoming more mainstream, with big banks increasingly incorporating digital currencies into everyday solutions. Younger consumers are more interested in alternative investments including crypto than their older counterparts. Our take: FIs aren’t currently offering Bluewhale’s system, but the model still illustrates how creditworthiness scoring could look in the future. FIs that include financial activity that demonstrates strength but doesn’t appear on a traditional credit report can assess loan requests more accurately—and potentially approve more customers.

Community banks and credit unions face rising delinquencies, margin pressure, and a disconnect with young consumers. As M&As accelerate, institutions must modernize tech and retain local trust to survive.

Sixty percent of current and prospective homeowners are unsure whether it’s a good time to buy a home—the highest uncertainty in three years, per Bank of America’s report. Meanwhile, 75% of prospective buyers are waiting for mortgage rates to drop, up from 62% in 2023. Younger generations, especially Gen Z and millennials, are delaying homeownership, with ownership rates flatlining. Stagnant rental prices and economic uncertainty add to the hesitation. Lenders must modernize offerings, streamline processes, and explore alternative financing like crypto and peer-to-peer loans to convert hesitant buyers when the market improves.

The Latin American consumer banking market is vast, yet over 40% of consumers are currently underbanked. Foreign banks looking to enter the market can tap this audience, but they should learn from and partner with local fintechs to do so.

Learn which mortgage lending market disruptors financial institutions should prepare for—and possibly leverage to attract more customers—in 2025.

The service advances Block’s goal of “banking our base” and could drive Cash App adoption.