The fintech terms that matter in 2026, explained

Using machine-learning models rather than fixed rule-based scorecards to assess creditworthiness. These models typically return a decision in seconds by reading hundreds of data points. Read more →

Non-traditional inputs used in credit decisions, including bank-transaction history, cash-flow patterns, rent or utility payments, that sit outside the standard credit-bureau file.

An ensemble machine-learning method (e.g. XGBoost) that most production credit models favour over deep neural networks because it handles messy tabular data well and its outputs can be explained.

A technique for attributing a model's score to its individual input features. Lenders use it to turn an opaque decision into the specific reasons regulators require.

The decay of a model's accuracy as real-world conditions move away from its training data. It is a particular risk for credit models that have only seen benign economic cycles.

An applicant with little or no credit-bureau history, such as younger people, recent arrivals or the self-employed. They are hard to score traditionally but legible to cash-flow underwriting.

A legally required explanation given to a declined credit applicant. In the US, Regulation B requires the specific principal reasons for the decision.

The system of record holding accounts, balances, deposits and the transaction ledger. Historically it was a monolithic mainframe application. Read more →

A core banking platform built to run on public cloud from the ground up, with API-first, microservices-based and horizontally scalable architecture. It contrasts with legacy mainframe cores. Read more →

Regulated APIs that let a customer share bank-transaction data with third parties on consent. They underpin cash-flow underwriting and account aggregation.

The authoritative record of accounts and balances. Modern cores separate the ledger from product logic so new products can be configured without rewriting it.

A design that splits a system into small, independently deployable services. It lets a bank swap modules such as savings, payments and lending one at a time rather than through a single high-risk programme.

The “speedboat” pattern: launching a new brand or product line directly on a modern core and migrating nothing initially, as Chase UK did on 10x. Read more →

Moving an established bank one product book at a time, usually starting with savings, while the legacy core keeps running everything else.

A blockchain token pegged to a fiat currency (usually the US dollar) and backed by reserves, used to move value with on-chain finality in seconds. Read more →

An on-chain representation of a commercial-bank deposit that stays on the bank's balance sheet, keeping clients inside the regulated perimeter, as in JPMorgan's Kinexys. Read more →

A digital liability of the central bank. Wholesale CBDCs target interbank settlement; retail CBDCs target consumer payments.

When a stablecoin trades away from its target value, usually under stress. For example, USDC fell below $0.90 in March 2023 after reserves were caught in a failed bank.

Final transfer of value recorded on a public blockchain and verifiable by the sender, rather than inferred from a correspondent-bank confirmation.

A third-party report on the assets backing a stablecoin. Now standard under regimes like MiCA, though the depth of attestations still varies.

The fee paid between banks on a card transaction, set by the card networks. It is a primary revenue line for embedded-payment platforms.

Interest earned on balances held in accounts before they are spent or moved; in embedded finance it is shared between the platform and its sponsor bank.

The chain of intermediary banks that moves cross-border payments. It is slow and fee-heavy, and the main system stablecoin settlement competes against. Read more →

Account-to-account rails that clear and settle within seconds, around the clock. Examples include the UK's Faster Payments and the US RTP and FedNow networks.

The schemes, including Visa and Mastercard, that route card transactions and set interchange. They are increasingly experimenting with stablecoin settlement to acquirers.

The bank or processor that handles card payments on behalf of a merchant and settles the funds to them.

Advancing a business cash against its unpaid invoices. It is a common embedded-lending product underwritten on a platform's own transaction data.

Delivering financial products, including payments, accounts and lending, inside non-financial software where the underlying activity already happens. Read more →

Infrastructure providers (Unit, Synctera, Treasury Prime, Stripe Treasury, Marqeta) that supply regulated rails and a sponsor bank so a platform can embed finance without its own licence. Read more →

The licensed bank beneath a BaaS arrangement that holds the regulatory obligations. Regulators hold it accountable for its fintech partners' conduct.

A layer between platforms and sponsor banks. The 2024 collapse of middleware provider Synapse triggered a “flight to quality” toward direct bank relationships.

Software built for one industry (construction, logistics, healthcare). Its workflow data makes it a natural distributor of embedded financial products.

Technology that helps financial firms meet regulatory obligations, including identity verification, AML monitoring, sanctions screening, reporting and regulatory-change management. Read more →

“Know Your Customer” is the process of verifying a customer's identity at onboarding, typically with document checks and liveness detection.

Continuously re-scoring customers on trigger events instead of fixed one-, three- and five-year review cycles, keeping risk ratings current. Read more →

Controls such as transaction monitoring, screening and reporting that detect and report suspicious financial activity.

Matching customers and payments against sanctions lists. It requires continual tuning across transliteration, fuzzy matching and trade-finance checks.

Scanning news sources for negative coverage of a customer; increasingly automated, with LLM summarisation used to collapse many hits into one narrative.

The EU's Markets in Crypto-Assets regulation. Stablecoin provisions applied from 30 June 2024 and crypto-asset service provider rules from 30 December 2024. Read more →

The EU's Digital Operational Resilience Act, a single regime for ICT risk, third-party oversight, exit plans and tested recovery in financial services.

The EU's AI law. It classifies credit scoring as a high-risk use case, bringing documentation, human-oversight and data-governance obligations. Read more →

The US federal framework for payment stablecoins, signed into law in July 2025, setting reserve, disclosure and audit obligations for issuers.

A UK Financial Conduct Authority standard requiring firms to deliver good outcomes for retail customers. It adds an outcomes lens to existing rules.

A digital-only bank with no branches, run on a modern core. Profitability hinges on interchange, deposits, lending margin and cost-to-serve. Read more →