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The Lending Brief - Sept 23

Welcome to The Lending Brief,
This is your weekly update on what’s breaking (and fixing) modern lending.
This week: Three insights. Three minutes. Zero fluff.
Big Tech’s Payments-to-Lending Playbook
🤔 What’s going on?
Last week, PayPal and Google signed a multi-year deal to co-develop a next-generation commerce and payments platform. Google's new Agent Payments Protocol means AI bots can "click buy" with pre-set rules. At the same time, Block’s Cash App has quietly turned its debit card into a lending engine, already extending $2B in annualized BNPL loans.
💡 Why does it matter to lenders?
Payments aren't the finish line. They're the entry point to credit. Whoever sees the transaction flow first — income, volatility, repayment signals — owns pre-qualification. Historically, that was the role of community banks and credit unions. If Big Tech wins, they'll capture the lending relationship.
⚡ Action Step:
Stop treating payments as plumbing. A business account with consistent deposits and predictable ACH flows is a pre-qualified borrower — but only if you connect transaction data to credit workflows before someone else does.
🔍 Want to understand Google’s AP2 better?
Here’s a YouTube explainer - Pro tip for busy lenders: skip to minute 1:40 and set playback to 1.25x! You’ll get the gist in just a few minutes.
The AI-Data Foundation Gap - Building Before You Build
🤔 What’s going on?
Bank Director's 2025 survey reveals a strategic disconnect: 66% of banks discussed AI budgets versus only 13% who discussed open banking. Yet 50% admit they don't use existing data effectively, and less than 10% believe they have 75-95% of their customers' data.
💡 Why does it matter to lenders?
AI needs clean, structured data to work. Banks rushing into AI without fixing their data foundation are building on quicksand. The 28% who upgraded data capabilities first are positioning themselves to win.
⚡ Action Step:
Audit your data quality before AI implementation. Can your systems deliver clean, validated information to AI tools? Without solid data infrastructure, your AI investment becomes expensive trial and error.
The End of Loan Applications
🤔 What’s going on?
Plaid’s US Fintech Effect 2025 study shows the cracks: nearly half of Americans say the loan process is confusing or too challenging. At the same time, fintech lending app usage has doubled since 2020, and 58% of consumers used BNPL last year — with Gen Z leading the charge, often just to cover income gaps.
Community banks and credit unions are still chasing documents and manually checking files before underwriting ever starts. For SMBs with only 27 days cash on hand, that lag can be the difference between survival and default.
At the same time, community banks and credit unions are still chasing documents and manually checking files before underwriting ever starts. For SMBs with just 27 days cash on hand, that lag can be the difference between survival and default.
💡 Why does it matter to lenders?
Borrowers are getting used to instant pre-qualification. PayPal links and WhatsApp payments normalize speed and simplicity. If a loan feels like paperwork, they’ll move where it doesn’t.
⚡ Action Step:
Stop thinking in loan files, start thinking in validation layers. Underwriters shouldn’t waste hours rejecting blurry uploads or wrong tax years. You need a layer that guarantees only clean, verified data reaches underwriting. That’s how you cut time-to-decision, protect against fraud, and meet borrower expectations before Big Tech sets the standard.
I work with community banks and credit unions on modernizing lending and member experience. If you’d like to see how this applies in practice, reach out for a short demo.
For more in-depth analysis (longer than what I share here), you can also follow my LinkedIn newsletter Lending Insights, where I unpack these trends in more detail. Click below to subscribe.
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📅 Next newsletter drops Tuesday, 09/30.
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