Rising competition and consumer expectations mean community financial institutions must operate more efficiently while delivering modern, personalized services. Meanwhile, advances in AI, open banking, cybersecurity and regulatory change are reshaping the industry and creating new opportunities for those who adapt. CSI recently surveyed banking leaders nationwide about how they are preparing for the year ahead. Their responses revealed cautious optimism and a focus on strengthening core capabilities while adopting new technologies. Foremost Challenge in 2026: AI Leaders increasingly view AI through a dual lens: a powerful driver of efficiency and automation across operations, but also a potential catalyst for fraud, scams and operational risk. Naturally, it remains a top concern for many in 2026. Institutions are gaining greater confidence in where AI can deliver real value, from automating routine tasks to strengthening security and supporting relationship-driven work. That confidence is most pronounced among larger community institutions, with 97% of banks holding $5 billion to $10 billion in assets saying they understand how AI can be applied in banking. As a result, the conversation has shifted from whether to adopt AI to how to integrate it responsibly. Success will depend on data readiness, governance frameworks and aligning AI use cases with existing workflows and risk management practices. Secondary Challenge in 2026: Cybersecurity and Data Privacy While the average cost of a financial services data breach declined from $6.08 million in 2024 to $5.56 million in 2025, cyberattacks still carry serious financial, reputational and regulatory consequences for institutions of all sizes. To remain secure, institutions must continue to prioritize investments in advanced monitoring and proactive threat-detection tools. Foundational practices, such as employee training and ongoing risk assessments, also remain essential to strengthening overall cyber resilience. Bankers’ Top Technology Investments The report shows that 2026 technology investments will be spread across multiple 2026 INDUSTRY OUTLOOK Community Bankers’ Top Challenges, Investments and Opportunities By JASON YOUNG Vice President of Product Management, CSI 16 NEBRASKA INDEPENDENT BANKER
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