  Recent analyses show that $\Lambda$CDM-based models optimised to reproduce
the clustering of massive galaxies overestimate their gravitational lensing by
about 30\%, the so-called lensing is low problem. Using a state-of-the-art
hydrodynamical simulation, we show that this discrepancy reflects shortcomings
in standard galaxy-halo connection models rather than tensions within the
$\Lambda$CDM paradigm itself. Specifically, this problem results from ignoring
a variety of galaxy formation effects, including assembly bias, segregation of
satellite galaxies relative to dark matter, and baryonic effects on the matter
distribution. All these effects contribute towards overestimating gravitational
lensing and, when combined, explain the amplitude and scale dependence of the
lensing is low problem. We conclude that simplistic galaxy-halo connection
models are inadequate to interpret clustering and lensing simultaneously, and
that it is crucial to employ more sophisticated models for the upcoming
generation of large-scale surveys.
