The Asset Finance sector entered 2026 from a position of relative strength. FLA members financed 34.3% of UK investment in machinery, equipment and vehicles in 2025 – the highest share since 2019. But the operating environment is becoming more demanding, not less, and several pressures are converging at the same time.
Here is where lenders are feeling it most.
The motor finance commission review
The FCA’s motor finance commission review has cast a long shadow over the sector. Final redress scheme rules are still anticipated in early 2026, with the complaints handling moratorium for most motor finance cases set to end on 31 May 2026.
For lenders with motor finance exposure, this is not a peripheral issue. It is consuming legal, compliance, and operational resource at a time when that capacity is needed elsewhere. The broader effect on confidence has been significant, affecting how lenders approach new product development and how investors assess risk in the sector.
Heightened regulatory scrutiny
Motor finance aside, the regulatory environment is tightening across the board. Supervisory scrutiny of the Consumer Duty is set to intensify during 2026, with the FCA embarking on a series of cross-sector reviews.
For Asset Finance lenders, this means demonstrating good customer outcomes is no longer a compliance exercise to be completed once and filed. It requires ongoing evidence, embedded processes, and systems capable of producing the data regulators expect to see. Many lenders are finding that their current infrastructure was not built with that level of transparency in mind.
Legacy systems and data usability
This brings us to what may be the defining operational challenge of 2026. Lenders have accumulated decades of data across origination, servicing, and asset management. The problem is not the volume of data, it is the ability to use it. Legacy architectures, inconsistent data models, and poor integration are among the biggest barriers to improving decision intelligence, with industry leaders increasingly recognising that the challenge is not data availability, but data usability.
Platforms that were fit for purpose a decade ago are now limiting what lenders can do. Reporting is slow. Integration with modern tooling is difficult. And the cost and risk of replacing core systems is significant enough that many organisations are deferring the decision, which only compounds the problem.
Technology consolidation and platform risk
The vendor landscape is also shifting. Technology consolidation continues to reshape the Asset Finance ecosystem, with vendor acquisitions reducing choice and in some cases forcing lenders onto unified platforms they did not originally select.
For lenders mid-programme or approaching a system review, this creates a more complex decision environment. The established players are changing through acquisition, the risk of being locked into a platform that no longer serves your needs is real, and the cost of getting the technology decision wrong is measured in years, not months.
A more challenging macroeconomic outlook
The UK economy now faces a more challenging outlook. With ongoing economic uncertainty weighing on activity, confidence and financial conditions, the FLA’s own chief economist’s assessment, published in April 2026. For Asset Finance lenders, this plays out in credit risk, demand volatility, and pressure on margins. IT equipment finance and plant and machinery finance showed strong February growth of 19% and 25% respectively, but the broader picture requires careful navigation.
Specialist talent
Running alongside all of the above is a talent challenge that does not get enough attention at board level. Implementing new platforms, managing regulatory change, and extracting value from data all require people with specific skills, and those people are in short supply.
From what we see in the market, demand for experienced Asset Finance software specialists consistently exceeds supply. Lenders running programmes without the right people in place are not just slower. They are exposed.
The common thread
Look at these challenges together and a pattern emerges. Most of them require the same response: better systems, better data, and the right people to drive change. Lenders who have invested in platform modernisation and built capable implementation teams are better placed to meet regulatory expectations, respond to market shifts, and compete effectively.
Those who have not are managing yesterday’s infrastructure while trying to operate in today’s environment. The gap is widening. 2026 is the year many organisations will decide which side of it they want to be on.
