Private credit is no longer on the sidelines. Once a niche asset class, it’s now a major force in global lending, and increasingly intertwined with the traditional banking system. What used to be a clear divide between banks and non-banks is evolving into something more collaborative, more complex, and more dependent on the right infrastructure.
Today, banks and credit funds are partnering in new and unexpected ways. Some are forming joint ventures. Others are passing along deals that don’t fit their credit box but still want to preserve the relationship. In many cases, banks retain servicing and deposits while credit funds provide the capital.
This new era isn’t defined by competition — it’s shaped by collaboration. And it’s raising important questions for lenders, borrowers, and everyone building the systems that support them.
In our latest Executive Briefing, Finley brought together two seasoned operators to unpack what’s changing and what it means for lenders, borrowers, and the systems that connect them. Below are key takeaways from the discussion, covering borrower preferences, bank–fund partnerships, infrastructure gaps, and what’s needed to build a more resilient system.
Credit is converging but borrowers still want simplicity
For borrowers, the source of capital matters less than the outcome: Can they get a loan? Will it be fast? Are the terms reasonable? And can they work with someone they trust?
When more parties are involved in a single deal—bank, fund, servicer, syndicate—the complexity increases fast. And complexity compounds. Each additional touchpoint in a lending relationship introduces more friction, more coordination, and more room for misalignment.
Borrowers don’t want to navigate that. They want access to capital, fast turnaround, and clarity in terms. The onus is on credit providers to make complex partnerships feel seamless to the end user.
Banks and credit funds each bring something different
The rise of these partnerships reflects the reality that banks and credit funds have complementary strengths.
Banks are built for long-term relationships. They know their customers, often across generations. They have deep infrastructure for servicing, risk monitoring, and workouts. They’re also more constrained by regulatory capital requirements, which can limit their lending appetite even when relationships are strong.
Credit funds, on the other hand, bring speed and flexibility. They can tailor structures to unique borrower needs and deploy capital where banks may hesitate. But many funds lack the operational depth that banks have spent decades building.
Put together, these strengths can result in a more agile, borrower-centric credit ecosystem — if the underlying systems support it.
Why this moment is different (and why it’s fragile)
There’s no question private credit is booming. Allocations are up. Deal volume is growing. Institutions that once focused solely on public markets are moving into private lending. And for now, the relationships between banks and non-banks are flourishing.
But this convergence may not be permanent. Many of today’s joint ventures and informal partnerships are still experimental. As markets evolve, so will priorities around cost of capital, risk tolerance, and return expectations.
If this is a new era of credit, it’s still taking shape—and not everyone is building for the same future.
Infrastructure is lagging where it matters most
Much of the innovation in credit markets today focuses on the front end: origination, deal execution, and liquidity. But the long tail—servicing, restructuring, and recoveries—is often overlooked.
That’s where real risk lives.
During the last major downturn, institutions that invested in portfolio monitoring and servicing tools fared better. Some spent basis points on oversight and came out stronger. Others didn’t, and many of them disappeared.
Today, a wave of new participants — pension funds, insurance companies, asset allocators — are entering the private credit market. Many don’t have the infrastructure to manage distressed scenarios. And without that foundation, they’ll struggle when the cycle turns.
What resilient systems look like
Credit infrastructure needs to do more than enable deployment. It needs to support the full lifecycle of a deal—especially when things don’t go as planned.
The best systems don’t force convergence for its own sake. They recognize the diversity of credit markets and the value of specialization. They allow banks and funds to integrate where it makes sense while maintaining differentiated workflows and risk management strategies.
Rather than reinventing the wheel, firms should adopt a simple framework: Use what works. Build what’s missing.
For large, rated deals, standardization and existing tooling may suffice. For relationship-driven credit, new systems may be required. Either way, technology should reduce friction, improve transparency, and make complex partnerships feel simple to the borrower.
What comes next
The rise of bank–fund partnerships marks a significant shift in how credit is sourced, structured, and delivered. But it also raises a challenge: ensuring that borrower experience improves, not worsens, as more players enter the picture.
Private credit is growing. Capital is flowing. But managing the long tail of every deal — monitoring risk, servicing loans, recovering value — requires long-term thinking and better infrastructure.
The future of credit isn’t just about moving money faster. It’s about building systems that endure.
Want more?
Watch the full webinar recording here or check out our latest guide on the convergence of public and private credit.
