Financial institutions are rapidly embracing generative AI in consumer lending, with 83% planning to increase their GenAI IT budgets in 2026, according to a new Celent report commissioned by Zest AI. The survey, conducted in August 2025, gathered insights from 106 U.S. banks, credit unions, and consumer finance companies, revealing that 67% of lenders have already implemented or will implement GenAI strategies by the end of 2026—marking a faster adoption rate than previous lending technology shifts like online lending, mobile lending, and statistical regression-based underwriting. The surge in adoption is driven by the need to improve operational efficiency, reduce costs, and enhance customer experience amid rising interest rates, heightened regulatory scrutiny, and competition from digital-native lenders. The report found that 21% of lenders are using GenAI to improve customer interactions, while 20% are focused on streamlining internal operations. Craig Focardi, Principal Analyst at Celent, noted the unprecedented speed of GenAI integration. “Generative AI is being adopted faster in lending than any previous AI technology wave we’ve tracked. Institutions are moving from pilot projects to full-scale deployment with remarkable urgency, driven by the need to compete on both efficiency and customer experience.” Early adopters are gaining a competitive edge, with 36% of respondents identifying themselves as leaders in GenAI adoption. The most impactful use cases include employee copilots that assist loan officers, processors, and underwriters by enabling natural language queries about policies and documents, automated compliance and regulatory reporting, and advanced business intelligence tools that deliver real-time analytics and insights. Seventy percent of lenders are adopting or planning to adopt GenAI for analytics and reporting dashboards—a faster uptake than for most other lending applications. However, this rapid deployment is outpacing the development of AI-specific regulations, raising compliance concerns. Lenders must prioritize tools built with transparency, fairness, and ethical design from the start, as these will soon become regulatory requirements. Zest AI’s LuLu, a generative AI lending intelligence platform, is designed to help institutions achieve measurable results. The platform enables lenders 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%—all while maintaining compliance and transparency. Mike de Vere, CEO of Zest AI, emphasized the shift from experimentation to execution. “The conversation has moved beyond testing AI to deploying it in ways that deliver real, measurable impact. The future of lending belongs to institutions that can innovate responsibly, scale securely, and support both customers and regulators.” Zest AI’s broader suite of solutions—including automated underwriting, fraud detection via Zest Protect, and strategic lending intelligence—supports lenders in modernizing risk management, compliance, and customer engagement. With over 600 active AI models and 50+ patents, the company is helping financial institutions transform the $17 trillion U.S. consumer credit market by identifying creditworthy borrowers overlooked by traditional models. The full Celent report, "Generative AI in Retail Lending," is available for download.