Community bank leaders are heading into the new year focused on three things: fast-changing fraud, a long credit cycle with no obvious turning point, and the need to compete on service and differentiation in their own markets. Those themes anchored a wide-ranging conversation at ProSight’s Annual Risk, Compliance, and Fraud Virtual Conference, where members of the Community Bank Council walked through the 2025 Community Bank Survey and compared notes on the challenges—and opportunities—they’re watching most closely. Here are some takeaways:
Fraud is evolving faster than defenses. Panelists said the speed and sophistication of fraud attempts continue to accelerate, stretching already-thin resources. “As much as we’re doing to solve their current attempts to infiltrate our systems,” said Deanna Cavanaugh of Connecticut Community Bank, “they’re already developing the next, more sophisticated method.” The rise of deepfakes and impersonation scams means banks must vet third-party tech carefully and step up client education. At the same time, old-school fraud has resurged. “What’s old is new again,” said Dawn Mugford of Norway Savings Bank, pointing to paper checks being stolen and altered. Oak Bank’s Melissa Torres noted that “businesses and [individual] clients are still writing a good number of checks,” which keeps that channel open to fraudsters.
Credit quality feels steady—but unusually late-cycle. Nothing in the data is flashing red yet, but leaders said the length of the current expansion is reason for caution. “We look at the credit cycle and right now we are in a long cycle,” Mugford said. “We’re waiting for the shoe to drop because at some point it will.” Panelists said the timing depends on tariffs, CRE performance, and interest rates. Robert Bender of The First National Bank of Elmer added that if a downturn hits, the industry will face “a larger population of younger-generation bankers who haven’t experienced a significant economic downturn.”
CRE is holding up, but global trade remains a wildcard. Cavanaugh said CRE is “largely stabilized,” including offices able to meet modern tech needs, while most panelists reported solid warehouse and multifamily activity in their markets. But tariff and supply-chain pressures haven’t disappeared. Costs have “been spread out along the supply chain,” Cavanaugh said, hitting exporters, importers, distributors, and end users—and, she added, will “work into the pricing” over time.
Growth will come from existing markets—and sharper differentiation. Survey respondents said their best opportunities lie with the customers and geographies they already serve. Torres noted that products may look similar across banks, but “we may do what the larger regional banks don’t in our same market, and we need to prove that.” For Bender, the key challenge is tailoring offerings to the real people in front of them: “We have an older demographic in our defined market area, so [it’s an issue that] has become really important to us, [and] we are monitoring that balance of products and services closely.”
