Predictions highlight deposits, lending, security

Partnering with William Mills Agency, Atlanta, we asked several leaders in the fintech world for their community bank industry predictions for the second half of 2026. This is the second of two parts we are running covering their responses. The first touched on AI-centered predictions..Deposits, lending, security at the forefrontThe market is shifting from simply supporting instant payments to making them a core part of the customer experience. Since adding RTP alongside FedNow, we have seen three-six times growth in instant payment transaction volume, driven by increasing demand for real-time money movement. Looking ahead, banks should focus on enabling businesses to both send and receive instant payments across multiple payment rails. For financial institutions serving SMBs, these capabilities will be essential to retaining operating accounts, strengthening treasury relationships, and supporting the AI-driven financial experiences that rely on immediate payment execution. ~ Keith Riddle, CEO, PayfiniaThe second half of 2026 will see banks focus on improving profitability by optimizing deposits, increasing fee income and competing more aggressively for lower-risk commercial loans. Banks will continue to aggressively pursue low-interest deposits while shrinking higher-cost deposits. They will seek to deploy the resulting liquidity into lower-risk loans, chasing select commercial and consumer clients and intensifying pricing competition for those relationships. At the same time, banks will look to grow fee income to offset continued pressure on net interest margin. Building deep, profitable relationships will continue to be key to driving shareholder value. ~ Mac Thompson, founder and CEO, White ClayThe second half of 2026 separates strategic from stuck. Community banks obsessing over deposit rates are missing the bigger shift: Consumers don’t leave for better rates — they leave for better platforms. SoFi and Robinhood are not winning on price; they are winning because they let people do everything in one place without logging into three different systems. The opportunity isn’t replicating their tech stack — it’s partnering with providers who can integrate investing, payments and emerging rails like stablecoins into your existing relationship. As technology cycles accelerate, the banks that survive treat partner selection as their most strategic decision.~ Josh DeTar, EVP-evangelism, TyfoneThe community banks gaining ground in 2026 are the ones that have modernized their lending operations — faster decisioning, cleaner digital workflows and less reliance on manual underwriting that slows deals down and frustrates borrowers. What we are seeing across the market is a widening gap between institutions that have streamlined origination and those still requiring manual touchpoints. In the second half, we expect competitive pressure on lending to intensify as larger banks and fintechs continue pushing downstream. Community banks have a real relationship advantage — but they need the technology infrastructure to act on it quickly when a borrower comes to the table. The ones that can match speed with service will win the deals that matter.~ Samantha Ziesemer, COO, MovemintBankers targeting consumer loan portfolio growth this year should consider how the rise of alternative lending, including fintech platforms, earned wage access products, peer-to-peer loans and BNPL, are impacting their understanding of a consumer’s true financial position. As additional forms of credit and payment options become more common, bankers incorporating alternative data into models can better assess trajectory, rather than just static positioning. Utilizing income and employment trends, rental history, utility payments and other consistent financial obligations helps enable bankers to serve more customers who may have been excluded by legacy models before, without necessarily inviting additional risk. ~ Carly Peroutka, VP, consumer finance and card, EquifaxSmall business borrowers continue to gravitate toward fintechs because they’re fast, digital and easy to work with. According to the Fed’s 2025 Small Business Credit Survey, online lenders captured 29 percent of applicants, up from 24 percent a year earlier and 17 percent in 2020. Yet small banks still fully approved 57 percent of applicants, the highest of any lender, and earned the highest borrower satisfaction at 65 percent, compared to just 35 percent for online lenders. The opportunity for banks isn’t to become fintechs. It’s to remove the friction from borrowing while building on the trust and underwriting expertise borrowers already value. ~ Sarah Koulogeorge, director of business development, CascaA fact: your next checking account customer is currently in elementary school. Youth banking continues to gain momentum as it helps banks lock in the next generation of customers early, when habits and loyalties are still forming. Sixty-one percent of Gen Z already switched primary banks in just two years, often landing with Chime, Cash App, or Step first. The fix? Banks offering youth-friendly digital tools, financial education and parent controls build engagement now and a pipeline of teen, student and adult customers later. Youth banking isn’t just a growth play. It’s a retention strategy with a decade-long head start.~ Marcell King, president and CEO, NuuviaEveryone’s bracing for deposit flight, but most banks are watching the wrong end of the K. They are chasing rate-sensitive money at the top while the bottom quietly erodes: households draining checking accounts to cover rising costs and gambling losses, and small businesses burning cash as tariffs and wages climb. That’s the real story of the second half of 2026. Community banks already approve far more small business loans than the megabanks do. The next edge is using their data to spot which customers and businesses are sliding toward trouble, and step in first. That’s not charity. It’s the whole point of a community bank.~ Mitch Rutledge, co-founder and CEO, Vertice AIThe headline numbers still point to a resilient consumer, but the distribution is uneven, and that is the K-shaped economy in a nutshell. The challenge is that a single credit score sorts people poorly. It lumps creditworthy borrowers in with riskier ones. For community banks, the opportunity is to identify creditworthy applicants who are stable and looking for a smarter way out of expensive revolving debt. This requires underwriting to the individual and replacing a 22 percent card balance with one fixed-rate loan. That’s a quality book that grows through the cycle.~ Matt Potere, CEO, Happy MoneyThe second half of the year will be a defining period for community banks as they determine how technology investments support growth, operational resilience and business banking strategy. Recent research CheckAlt commissioned with Datos Insights found that 75 percent of financial institutions are actively evaluating or planning to evaluate receivables and payment technology within the next 18 months. The findings suggest these decisions are increasingly being driven by client expectations, revenue opportunity and the need to reduce operational complexity. The remainder of 2026 will mark a shift from evaluation to execution as banks turn technology priorities into measurable business outcomes.~ Patrick Law, president and CEO, CheckAltAs we enter the second half of 2026, community financial institutions will place greater emphasis on decision quality, not just decision speed. Traditional signals alone are becoming less predictive as fraud grows more sophisticated and consumer financial behavior becomes increasingly complex. Banks that gain a more complete view of accounts, payments, and behavioral activity will be better equipped to identify qualified consumers and detect risk earlier. We expect more institutions to recognize that growth and fraud prevention are no longer competing priorities. Better intelligence is helping institutions make more confident decisions while improving both portfolio performance and operational efficiency. ~ John Gordon, CEO, ValidiFIAs financial institutions continue to evaluate their technology investments, security posture will increasingly become a deciding factor, not just product functionality. Growing concerns around ransomware, fraud and third-party risk are driving institutions to take a closer look at vendor due diligence, compliance standards and operational maturity. Community banks will place greater emphasis on factors such as certifications, resilience training and long-term stability, shifting security from a behind-the-scenes requirement to a meaningful differentiator in technology selection.~ Amanda Licona-Crocker, president, SWIVELEarly trends highlight growing operational and compliance risks stemming from limited familiarity with fraud investigation processes and controls associated with real-time and digital transaction channels. Banks are responding by enhancing ongoing education initiatives for both customers and frontline staff to increase awareness of emerging fraud schemes. Concurrently, fraud and AML/BSA teams are continuing to receive specialized training to strengthen capabilities for identifying, investigating and responding to evolving fraud typologies. They are also implementing regular updates to policies and procedures to ensure investigative practices remain effective, compliant and generally documented. ~ Sriram Natarajan, president, Quinte FinancialOne of the defining trends for CFIs in 2026 is the recognition that inheritance is an operational challenge, not simply a legal event. As generational wealth transfer accelerates, institutions have an opportunity to rethink how they support families through estate transitions while preserving trusted relationships. The conversion is shifting beyond beneficiary forms toward the infrastructure needed to coordinate estate execution, reduce unnecessary deposit attrition, and create continuity between generations before assets leave the institution. ~ Martha Underwood, founder and CEO, Prismm