Guest Commentary By Carl White, Federal Reserve Bank of St. Louis


Bankers Cite Economy, Cybersecurity as Top Risks


After several years of pandemic-related internal and external challenges, the nation’s community bankers have largely turned their focus to traditional concerns related to the economy, technology and competition from nonbank providers.


Tat switch is one of the key findings of this year’s Conference of State Bank Supervisors National Survey of Community Banks. Te survey is conducted annually by CSBS and state bank regulators. Nearly 500 bankers answered questions about the challenges and opportunities they face in the industry. Te report also includes extensive comments from five bankers from around the country on survey topics.


CHIEF EXTERNAL AND INTERNAL RISKS Te bankers surveyed cited net interest margins and economic conditions as the top external risks they face. Tat’s not terribly surprising as the survey was conducted during a period (April through July 2022) of rising consumer prices and interest rates and falling asset prices and gross domestic product.


While rising interest rates do provide an opportunity to increase margins, there are substantial risks, too, hence bankers’ concern. Loan demand remains a concern but less so than last year, and it is virtually tied with regulation and the cost of technology as a major risk.


Cybersecurity concerns, once again, dominated a list of internal risk issues, with 65% of respondents indicating it was extremely important. Cybersecurity also ranked as a top risk in the area of current and future technological challenges.


22 mobankers.com


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