Oct 22, 2026 · 31 min · 10 segments
This annual report from CSBS covers a wide range of information on community banks. The report focuses on external risks including inflation, internal risks including cybersecurity, technology costs…
Joe BerkowitzHost
So, but anyway, all right, some of the key findings here, let's go through this for a minute or two.
For the second consecutive year, respondents identified net interest margins and core deposit growth as the top two external risks, technology costs, and the cost of funds Ranked third and fourth.
Concerns about regulation as an external risk continue to fall with 62% of respondents identifying regulation as either an extremely important or a very important area of concern compared with 75% in last year's survey and 89% in the 2024 survey.
indicated that they were unsure as to where inflation would return to the price stability target of the FOMC or that they expect it to occur beyond 2029.
This represents a sizable increase from last year's survey where 30% of respondents were unsure or thought that the 2% target would occur in 2028 or later.
Cyber security was identified as the top internal risk for the ninth year in a row, followed by technology implementation and costs.
Interest rate risk, which was called market risk in last year's survey, rose from the lowest internal risk to the fifth highest internal risk this year, likely reflecting the shifting interest rate environment.
More respondents have established relationships with fintech providers this year, with 33% of respondents utilizing fintechs for mobile banking support.
Community banks continue to compete most intensely with one another for small business, commercial real estate, and agricultural loans.
Meanwhile, they compete most heavily with regional or national banks with a physical market presence for payment and wealth management slash retirement services and with credit unions for smaller dollar unsecured loans.
Banking market competition remains the primary challenge to retaining core deposits, followed by economic uncertainty.
FinTech competition was the third cited risk with 45% of respondents rating it as an extremely important or a very important challenge to their business up from 34% last year.
In response to an open-ended special question regarding regulatory changes and their impact over the past 12 months, bankers revealed a cautiously optimistic outlook.
Most noted that overall regulatory relief was having a positive impact, although many expressed concern that such relief may be short-lived.
In another special question concerning the impact of stablecoin adoption on their banks, close to 60% of respondents reported they saw deposit erosion and reduced lending capacity and uneven regulatory implementation or regulatory arbitrage as the most impactful or moderately impactful to their banks.
When asked about their current use of AI, about 53% of respondents indicated that they were piloting AI technology or engaging in limited use across specific functions.
For those community bankers already engaged with AI, 77% say they were using it to assist with fraud detection and security.
So, but anyway, all right, some of the key findings here, let's go through this for a minute or two.
For the second consecutive year, respondents identified net interest margins and core deposit growth as the top two external risks, technology costs, and the cost of funds Ranked third and fourth.
Concerns about regulation as an external risk continue to fall with 62% of respondents identifying regulation as either an extremely important or a very important area of concern compared with 75% in last year's survey and 89% in the 2024 survey.
indicated that they were unsure as to where inflation would return to the price stability target of the FOMC or that they expect it to occur beyond 2029.
This represents a sizable increase from last year's survey where 30% of respondents were unsure or thought that the 2% target would occur in 2028 or later.
Cyber security was identified as the top internal risk for the ninth year in a row, followed by technology implementation and costs.
Interest rate risk, which was called market risk in last year's survey, rose from the lowest internal risk to the fifth highest internal risk this year, likely reflecting the shifting interest rate environment.
More respondents have established relationships with fintech providers this year, with 33% of respondents utilizing fintechs for mobile banking support.
Community banks continue to compete most intensely with one another for small business, commercial real estate, and agricultural loans.
Meanwhile, they compete most heavily with regional or national banks with a physical market presence for payment and wealth management slash retirement services and with credit unions for smaller dollar unsecured loans.
Banking market competition remains the primary challenge to retaining core deposits, followed by economic uncertainty.
FinTech competition was the third cited risk with 45% of respondents rating it as an extremely important or a very important challenge to their business up from 34% last year.
In response to an open-ended special question regarding regulatory changes and their impact over the past 12 months, bankers revealed a cautiously optimistic outlook.
Most noted that overall regulatory relief was having a positive impact, although many expressed concern that such relief may be short-lived.
In another special question concerning the impact of stablecoin adoption on their banks, close to 60% of respondents reported they saw deposit erosion and reduced lending capacity and uneven regulatory implementation or regulatory arbitrage as the most impactful or moderately impactful to their banks.
When asked about their current use of AI, about 53% of respondents indicated that they were piloting AI technology or engaging in limited use across specific functions.
For those community bankers already engaged with AI, 77% say they were using it to assist with fraud detection and security.
The rest of this transcript — segmented and speaker-labeled, so you land on the exact moment something was said
Search every transcript — by keyword, by phrase, or by meaning, across every show Radar indexes
Trends — what is surging across podcasts, measured against its own baseline
Alerts — when a name you follow appears in a newly indexed episode
No account is needed to search Radar.
