TLDR: A new report reveals that U.S. financial institutions are rapidly integrating generative AI into their lending operations, with 83% planning to boost their GenAI IT budgets in 2026. Two-thirds of lenders are set to implement GenAI strategies by next year, driven by desires to enhance customer experience and improve operational efficiency.
Financial institutions across the United States are embracing generative artificial intelligence (GenAI) at an unprecedented pace within their lending divisions, according to a recent industry report. The study, titled ‘Generative AI in Retail Lending,’ was conducted by Celent and commissioned by Zest AI, surveying 106 U.S. banks, credit unions, and consumer finance companies in August 2025.
The findings indicate a strong commitment to GenAI, with a remarkable 83% of lenders planning to increase their consumer lending GenAI IT budgets in 2026. A significant portion of these, 41%, anticipate budget increases exceeding 5%. This surge in investment underscores the industry’s belief in the transformative potential of GenAI.
Perhaps even more telling is the rapid implementation timeline: two-thirds (67%) of the surveyed lenders have either already completed or are slated to implement GenAI strategies by 2026. This adoption rate is notably faster than previous technological innovations in lending, including traditional AI/Machine Learning, online and mobile lending platforms, and statistical regression-based automated underwriting systems.
The primary drivers behind this accelerated adoption are clear. Financial institutions are leveraging GenAI to enhance customer experience, cited by 21% of respondents, and to reduce expenses while improving operational efficiency, a motivation for 20% of lenders. Analytics and reporting dashboards are a key area of focus, with 70% of lenders already adopting or planning to adopt GenAI for these functions.
However, this rapid technological advancement is not without its challenges. The report highlights a concern that the swift adoption of GenAI is outpacing the development of corresponding AI legislation. This creates potential compliance risks for institutions that do not prioritize responsible AI development, emphasizing the critical need for tools built with transparency, fairness, and ethical practices from the outset.
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Zest AI’s generative AI lending intelligence platform, ‘LuLu,’ is noted for its ability to translate GenAI adoption into tangible benefits. The platform reportedly enables institutions to consolidate up to 50% of their reporting tools, reduce analysis time and staffing by 80%, and accelerate decision-making by as much as 90%. These advancements allow lenders to maintain competitiveness in speed and efficiency without compromising regulatory compliance and transparency. Celent’s research signals a definitive shift within the financial sector from experimental phases to concrete execution of GenAI strategies.
