The Future of Lending in EMEA: Looking ahead to 2026

The world of finance exists in a state of flux. Less a solid landscape, and more like a churning ocean of changing disruptions. This is why adaptability is the surest way for financial enterprises to survive and thrive in a fluid environment. But adaptation depends on foresight; on looking ahead and anticipating change. 

As the year comes to a close, we turn our thoughts to the future social, political, and technological trends that steer lending. When we think about the financial world as a whole, there are three ‘growth levers’ upon which the machinery of finance depends, and which can be subject to friction and disruption. These points of friction include: 

1. The capabilities of banks and their partners
2. Regulation and governance both domestic and cross-border
3. Customer demands and preferences affecting retention and acquisition

Reducing that friction depends on improving the technology, streamlining processes, and adhering to compliance that banks operate with. But that improvement can only come from proactive, forward-thinking organizations. 

So, let’s look ahead to some of the biggest trends and most important regulations we see changing the game in EMEA in the next year. 

Regulatory shifts in EMEA

One of the biggest factors for commercial lenders operating in Europe, the Middle East, and Asia (EMEA) to contend with next year, is compliance and governance. 2026 will involve a swathe of new or updated regulations affecting the ways lenders do business, including:

1. Europe

In Europe, the biggest key regulations to consider are the Capital Requirements Directive VI (CRD VI), the Capital Requirements Regulation III (CRR III), and the Digital Operational Resilience Act (DORA).

• CRD VI: This regulation focuses on harmonizing the rules for non-EU banks operating within the EU, within a standardized framework that involves opening licensed branches in the region.
• CRR III: This regulation aims to reduce variability and apply proportionality in calculating risk-weighted assets (RWAs), which determine the quantity of loss-absorbing capital lenders must hold.
• DORA: This cybersecurity regulation will continue to establish a unified, mandatory framework for IT risk management, data sharing, and incident reporting in the European financial industry (with the first wave of fines potentially being introduced in 2026).

2. Middle East

In the Middle East, next year will see the expansion of the Central Bank of the UAE’s (CBUAE) Federal Decree Law No. 6, 2025, which has a compliance deadline of September 2026.

• Federal Decree Law No. 6, 2025: This regulation aims to consolidate compliance for lenders, banks, insurers, and payment service providers under one unified framework, while also enhancing customer protection and anti money laundering measures. 

3. Asia

Meanwhile, in 2026 the Asian commercial lending market (among many others) will deal with further implementation of the final phase of the worldwide Basel 3 regulation, or Basel 3.1:

• Basel 3.1: These reforms will reduce the variability in the capital requirements of financial institutions; limiting capital calculated with internal models to no less than 72.5% of that found using standardized approaches.

What are the implications for commercial lenders? 

With the above regulatory upheavals in mind, let’s now consider how they will specifically impact commercial lenders. We predict that the ways that banks and lenders calculate risk will change in the next year. We’ll see a major overhaul of credit, market, and operational risk calculations in 2026. Further, commercial lenders will need to display more transparency, security, and efficiency in their processes and digital systems, while also working within broader regional or international lending frameworks.

How lending will change

Remember those three growth levers we discussed earlier? Well, all of them can be exacerbated by other social and environmental factors. These factors can make borrowing and lending harder, or simply disincentivize investors from risk. This, in turn, adds more friction to the lending market and to the delicate instrument of finance and trade. 

Furthermore, these stressors, as well as the growth levers we already mentioned, can have unforeseen consequences upon lending which even the original legislators cannot predict. For example, thinking about this in terms of governance, the new rules of Basel 3.1 may lead to higher capital requirements for traditional lenders in the UK. 

Why is this? Basel 3.1 aims to limit the capital reduction benefits lenders receive from using their own internal ratings-based (IRB) models. This may, therefore, increase the minimum capital required for certain exposures. Consequently, loans to large enterprises which lack an external credit rating might see an increase in risk-weighted assets.

Sometimes there can be subtle negative consequences in these regulatory changes, even if they appear, on the surface, generally positive. For instance, in early December of 2025, the Bank of England issued stress test results showing that banks can lower their core tier one capital to 13% from 14%. Further, private market funds have ballooned to a whopping $16 trillion of assets under management globally. Of this vast sum, approximately $11 trillion is currently in private equity and private credit funds. Indeed, in the United Kingdom alone, private equity-backed companies account for 15 per cent of corporate debt and 10 per cent of private sector jobs. These firms can exacerbate economic growth by boosting funding for infrastructure and project finance. 

What’s more, the Financial Times reports that upcoming US banking regulation reforms could possibly free up almost $2.6 trillion in lending capacity, enabling them to compete in the EMEA markets. This deregulation by the Trump Administration could potentially enable banks to allocate their excess capital into loan growth, dividends, share buyback, mergers, and acquisitions — fuelling further growth and competition in the region. All this shows that regulation is starting to reduce the friction in capital flows evident across the region, the investor base and the business communities. 

As a knock-on effect of this, the higher costs of capital could pass to corporate borrowers — either via stricter lending criteria or higher interest rates. Meanwhile, traditional lenders might see new competition in certain cases from non-bank financial institutions (such as the growing participation of private credit actors) who are not subject to the same rules.

Indeed, a number of private credit houses (such as Blackrock and Apollo, per The Financial Times) have now volunteered to participate in the Bank of England’s stress tests. This shows that creditors and lenders are already taking the proactive steps to reduce the predicted friction between capital flow and consumption in the coming year.

The new importance of ESG

Of course, new governance is also integrating ESG directly into the prudential framework of lenders. It will no longer be a secondary, optional goal.

For example, the European Banking Authority’s (EBA) new guidelines on the management of ESG risks (applicable from January 2026 for large institutions) is set to change the game for commercial lenders. Namely, it will ensure that they identify, manage, and monitor the financial risks that stem from ESG factors, and gravitate towards lending to more sustainable businesses.

From next year, commercial lenders must integrate ESG risks into the creditworthiness assessment of their corporate borrowers. Loans to companies that are major polluters will have a negative effect on credit ratings and the cost of lending.

Lenders subject to this regulation must also perform regular materiality assessments along short, medium, and long-term timeframes; while the EBA’s guidelines will also push lenders to actively increase their green/sustainable lending to increase their Green Asset Ratio (GAR) score.

Compliant IT infrastructure

Furthermore, we can see that regulations like DORA mean that commercial lenders now have a mandate to significantly revamp their IT systems, cybersecurity, and vendor management. The protection of internal and external data is paramount, particularly when cybercriminals are continually updating their own tech.

And, of course, no lender is an island. Financial institutions in EMEA can no longer afford to turn a blind eye to the third parties they collaborate with. Indeed, considering that so much of 2026’s regulations are concerned with anti-terrorism and money laundering operations, lenders will have to remember that they operate as part of a vast network of trade and borrowing, and take care who they choose to work with. 

Plus, commercial lenders are now required to display greater transparency on the subject of their collaborators, their IT infrastructure, as well as any AI systems they might use for credit scoring. With AI technologies only continuing to become more ubiquitous across the finance industry, we see that more regulation keeping this tech in check is even more likely for lenders. This will, in turn, have more of a knock-on effect on the friction exerted upon the precious flow of capital. 

Conclusion: What will define successful commercial lenders in 2026 and beyond?

In summary, regulatory shifts in 2026 will significantly impact commercial lenders in EMEA with new compliance reducing variability in capital requirements and enshrining more rigorous cybersecurity standards, while enhancing customer protection and anti-money laundering measures. All these changes will alter risk calculation methods, necessitate greater transparency, and integrate ESG factors into lending assessments. Meanwhile, higher capital requirements may lead to stricter lending criteria and increased borrowing costs, reshaping competition in the financial sector.

Ultimately, the most successful commercial lenders operating in the EMEA region will be the most proactive ones. The longer these enterprises put off investing in their tech, their relationships and processes, the more costly their situation will become in the long run. 

The best time to start was yesterday, the second best time is today. Because digital transformation is no longer a ‘one-and-done’ concept. It’s now a constant process of evolution and iteration to stay agile and competitive in a changing world. 

You can find out more about SAP Fioneer`s comprehensive lending stack here.