The present study characterizes the formability of thin polyelectrolyte films which were modified by curing and alternatively reinforced with nano-sized clay-platelets. To investigate the suitability of modified polyelectrolyte coatings for biomedical applications, films were applied on both the polycrystalline and single crystal NiTi 50.9 at.% substrates and mechanically deformed in simulated body fluid (Hank's solution) under cyclic tensile loading. In situ electron backscatter diffraction, in situ confocal laser scanning microscopy, photoelastic-modulated infrared reflection absorption spectroscopy, and ellipsometry measurements were employed to study defect formation. Based on observations from the substrates and films, conducted before and after to mechanical testing, defect formation during tensile cycling was related to substrate and film characteristics. Defects emerged particularly in unmodified and cured polyelectrolyte films on both polycrystalline and single crystalline substrates within areas of pronounced topographic changes. In contrast, the nanoclay-modified coatings remained defect free, indicating a remarkable improvement of formability, which can be related to the reinforcing clay-platelets within the polyelectrolyte matrix.