Private credit has moved from a niche source of corporate finance to a significant force in corporate lending, with the market now managing over $2 trillion in assets. As private credit firms gain ground, the role of traditional banks in originating, structuring and distributing corporate debt is evolving.Much of private credit’s growth has come from filling a vacuum. Uplifts in capital requirements have pushed middle-market and regional banks out of segments they once served, creating space for private credit firms to step in and support borrowers who could not rely on traditional lending methods. Growing investor appetite has reinforced the shift, and borrowers seeking flexibility and customized credit frameworks have followed.Private lenders and banks have since operated alongside each other throughout the lending lifecycle. Banks provide leverage facilities to credit funds and enter forward-flow arrangements that route originated assets to private lenders, so the same relationship carries both competition and collaboration. The growth of asset-based and specialty finance is deepening the interdependence, creating transactions with more moving parts. Regulators have responded by increasing scrutiny on deal cycles where private credit involvement is significant, raising expectations for transparency, auditability and control across the full lending lifecycle. For banks, the question is less about competing with a new source of capital, and more about operating in a lending market that no longer behaves in a linear, single-institution way. Lending now runs across institutional boundariesOrigination that once sat within a single organization now involves multiple parties, with lending products assembled across institutions. A single transaction can draw on a bank's client relationship, a fund's capital, a servicer's operational capacity and a valuation provider's input, each with its own systems and control requirements. Most corporate lending platforms were built for a different shape of transaction. Activities such as covenant management and multi-entity cash pooling already require coordination across teams and jurisdictions inside a single institution, and in many banks those processes have accumulated over decades. Extending them across institutional boundaries exposes how much of the coordination still depends on manual handoffs and stitched-together integrations. Banks have invested heavily in digital transformation, and AI is already improving credit analysis, document review and risk management at the task level. However, these benefits stop at the mission-critical level. Only 12% of agentic AI use cases in financial services reached production in the last year, with 70% of banks admitting to a gap between their agentic AI ambitions and operational reality.By contrast, non-traditional lenders have built operating models around speed and adaptability. With no accumulated process debt and more streamlined decision-making, these platforms can assess opportunities, structure transactions and connect to partners faster than many incumbents. Private credit firms compete on a different axis, raising capital in private markets rather than on how quickly their operations can change. What separates the two is coordination. Banks need to orchestrate the agents, people and systems in a transaction as a single end-to-end process, not as parts governed separately by whoever owns them. Process re-engineering is the route back to competitivenessLayering AI onto fragmented processes may deliver isolated efficiency gains, but it will not solve deeper operational challenges. That requires a fundamental redesign of processes across origination and servicing. Modern origination combines automation with real-time data to compress credit assessment. Servicing platforms reduce administrative load while giving borrowers greater transparency. Relationship management tools help banks identify opportunities and tailor structures more precisely. Investment in infrastructure, partnerships and fintech acquisitions supports each of these.Treating that work as a program with a completion date is where most institutions go wrong. Lending operating models are not static, and the market reshaping them is not finished. The process a bank designs around today's private credit relationships will be outdated within a few cycles because the products and regulatory expectations will have moved on.What separates the institutions that hold ground from the ones that lose it is the ability to re-engineer continually, at a pace that matches how quickly their lending relationships change.Building the bank for the next era of lendingPrivate credit’s growth reflects a wider transformation across financial services. Specialist lenders and technology-driven firms are reshaping areas historically dominated by traditional institutions, while lending relationships are becoming increasingly interconnected across banks, private credit firms and non-traditional digital lenders. For banks, the response cannot stop at incremental technology upgrades. Those that succeed will move beyond legacy processes and build the ability to continually redesign how they originate, service and manage lending relationships as the market converges. That means orchestrating the agents, people and systems in a transaction as a single end-to-end process, with the controls and audit trail regulators expect to be built into the process itself rather than bolted on afterwards. The next era of corporate lending will favor banks that can adapt to a more interconnected market, working across providers to deliver faster, more tailored and more adaptable financing. Yes#PrivateCreditJawwad Rasheed Financial Services Transformation and Advisory LeadCamunda02 Sep, 2026