Community bank credit leaders are managing an unusually wide set of pressures—from AI-powered fraud to shifting tariffs, CRE uncertainty, and growing competition from private credit and fintechs. At ProSight’s Annual Risk, Compliance and Fraud Virtual Conference, three chief credit officers shared what they’re watching most closely.
Fraud is faster, smarter, and increasingly AI-driven. Orrstown Bank CCO David M. Chajkowski said perpetrators are using AI to evade controls. “The ability of the fraudsters to figure out ways to use the new technology is a constant battle,” he said, adding: “We’re seeing heightened levels of wire fraud attempts and other types of customer account takeover attempts.” While Orrstown’s fraud team continues to blunt losses, Chajkowski warns: “You always have to be very vigilant.” That goes for banks and customers alike.
AI isn’t just a challenge; it’s becoming a useful internal tool. Bank of Marin CCO Misako Stewart said the bank is using Microsoft Copilot to help staff search policies and underwriting guidelines more easily. Meanwhile, some community banks are taking a more gradual approach. Chajkowski said Orrstown is intentionally moving slowly: “We’re trying to educate ourselves as much as we can, because we don’t want to make the mistake of jumping in feet first … [and] becoming too reliant on a technology that we don’t fully understand yet.”
Data analytics are speeding up reviews. Bristol County Savings CCO Linda Sternfelt highlighted how analytics tools are helping with portfolio surveillance. She said the bank recently “evaluated 74 relationships in about 50 minutes,” reducing manual burden and sharpening early-warning detection.
Tariffs are creating uncertainty for borrowers. Stewart said contractors and construction-related businesses exposed to global supply chains are seeing materials costs rise or projects delayed. Chajkowski added that while “very little impact” has appeared in financial statements so far, margins may face pressure in late 2025 and early 2026.
CRE remains a selective, closely watched space. Bank of Marin continues monitoring its CRE concentration, especially fixed-rate loans made when rates were low. Stewart noted: “We’re not out of the woods yet,” adding that while the bank still makes real estate loans, it is now “being much more selective” and “asking more questions than we used to in the past.”
Competitive pressures are shifting. Fintechs and private credit firms are becoming more active in areas traditionally served by banks. Sternfelt cautioned that banks shouldn’t compromise underwriting standards. Chajkowski agreed, warning against “the temptation to stretch” as competition grows. Stewart put it plainly: “Our competitors are not going to be the traditional banks, so a certain amount of open mindedness is going to be really important.”
