Top Challenges and Opportunities for Community Banks in 2025 By ALLISON MADDOCK, Senior Vice President and Chief Product Officer, CSI Continued adoption of open banking, enhanced cybersecurity and evolving regulatory concerns shape what financial institutions must consider when developing their strategies. However, these areas also represent a tremendous opportunity for those who adapt. CSI’s Banking Priorities Survey — which asked a cross-section of community bankers nationwide about their strategies and priorities for 2025 — explored both, taking the industry’s pulse and plans for the year. 2025’S FOREMOST CHALLENGE: CYBERSECURITY/DATA PRIVACY Although we’ve made advances in cybersecurity monitoring technology, cyberattacks continue making headlines and concern institutions of all sizes. The average cost of a data breach rose from $5.9 million in 2023 to $6.08 million in 2024. A successful cyberattack can also expose an institution to reputational and legal consequences. For all these reasons, paired with regulatory scrutiny, 28% listed cybersecurity/data privacy as the most pressing issue, surpassing all other concerns. To stay ahead of cyber threats, institutions need around-the-clock monitoring and response. A managed cybersecurity monitoring platform helps institutions identify anomalies and send alerts for investigation to ensure the threat doesn’t spread. Solutions like data loss prevention (DLP) help institutions protect their data and control how it’s shared. Implementing cyber hygiene is another effective strategy to improve security and keep employees and consumers safe. 2025’S SECOND MOST SIGNIFICANT CHALLENGE: INTEREST RATES Interest rates surged in 2022 and 2023 due to the Federal Reserve’s efforts to curb inflation, creating a challenging environment for community banks. 22 WEST VIRGINIA BANKER
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