As you want to get a List, not a map, your last function call cannot be Collectors.toMap, needs to be Collectors.toList. Now, each invocation to the map method should generate a new Map, so something like this would do:
List updated = values.stream()
    .map(v -> {
        String[] parts = v.split(":");
        Map<String, String> map = new HashMap<>();
        map.put("name", parts[0]);
        map.put("display", parts[1]);
        return map;
    )
    .collect(Collectors.toList());
Some people would prefer:
List updated = values.stream()
    .map(v -> {
        String[] parts = v.split(":");
        return new HashMap<>() {{
            put("name", parts[0]);
            put("display", parts[1]);
        }};
    )
    .collect(Collectors.toList());
which creates an extra helper class. Or if you can use Guava:
List updated = values.stream()
    .map(v -> {
        String[] parts = v.split(":");
        return ImmutableMap.of("name", parts[0], "display", parts[1]);
    )
    .collect(Collectors.toList());
BTW: In the examples I used Listbut the complete type of what you describe would be List<Map<String, String>>.