Did you know, long before modern statistics existed, rulers in ancient Babylon conducted surveys? They recorded numbers of people and livestock on clay tablets as early as 3800 BC to manage taxes, labor, and resources. Today, while surveys are far quicker and easier to complete, their primary purpose remains much the same — to inform better decision-making.
The American Bankers Association’s (ABA) recent report, Community Bank CEO Priorities for 2026, offers valuable insights into how leaders of financial organizations view evolving market conditions, their thoughts on opportunities and risks, and their priorities for the year. Drawing on responses from 362 senior officers at institutions with under $3B in assets, the survey reflects perspectives from across the country.
An Optimistic but Cautious Outlook
Despite navigating an environment in which competitive, technological, and regulatory pressures continue to intensify, community financial institution (CFI) leaders entered 2026 with a sense of measured optimism. More than three-quarters of respondents to ABA’s survey expressed a level of confidence in both the US economy and, more strongly, their local markets.
In fact, 58% are expecting to expand their current footprint over the coming year and 73% are prioritizing organic growth in local markets. The emphasis appears to be on deepening relationships and strengthening community presence enabled by investments in technology and innovation.
However, this optimism is unfolding against a backdrop of growing uncertainty. Leaders taking part in the survey reflected that although consumers and businesses remain active, they are more deliberate in their decisions — signaling a cautious mindset shaped by heightened awareness of risk in a fast-moving landscape.
This cautious optimism aligns with broader industry expectations. In fact, Mike Dohren, President of PCBB, commented on many of these same pressures and priorities in a previous BID earlier this year.
Challenges and Strategic Priorities
For CFIs, growth and resilience remain both pressing concerns and guiding priorities.
A converging set of challenges is reshaping the operating environment, heightening competition in an increasingly digital-first marketplace. Surveyed leaders pointed to cybersecurity (73%) and core deposit growth (72%) as the issues most likely to keep them awake at night. These were closely followed by fraud (65%), talent retention (64%), customer acquisition (60%), and the pace of technological change (56%).
Respondents’ top strategic priorities for the year ahead mirror these challenges:
- Core deposit growth (79%) and new customer acquisition (71%) top the list of priorities. Competition for deposits is strong, with both banks and non-banks offering attractive incentives, raising the risk of churn. To succeed, CFIs will need to move beyond traditional deposit-gathering by deepening primary relationships, streamlining onboarding, using data more strategically to target customers, and delivering experiences that resonate with SMBs and younger generations.
- Margin and funding cost management (69%) is another key priority, reflecting pressures from rising operational costs, expensive deposits and slowing loan demand. Smaller institutions, in particular, are likely to face greater resourcing challenges, reinforcing the need for operational efficiency and targeted investment. In response, some CFIs are turning to automation and artificial intelligence (AI) to do more with less — boosting efficiency while maintaining the personalized service they are known for.
- Meanwhile, talent recruitment continues to be a priority for nearly two-thirds of institutions, as competition for skilled workers intensifies. At the same time, fraud prevention, cited as a key focus by more than half of CFIs, highlights the growing sophistication of threats and the high cost of being unprepared — both financially and reputationally.
Together, these priorities demonstrate that many institutions are looking to balance growth with profitability and resilience in the year ahead.
The Technology Imperative
Ultimately, many of the risks and strategic priorities CFIs face — from deposit growth and fraud prevention to talent retention and margin management — share a core enabler in technology transformation.
By placing efficient processes and modern technologies at the center of their strategy, CFIs will be better placed to not only manage these challenges but also strengthen their growth prospects. Surveyed leaders plan to expand their digital products (50%), strengthen proactive fraud detection and prevention (46%), and create interactive, self‑service digital experiences (45%) to boost customer engagement in the year ahead.
These leaders are also prioritizing digital tools that enhance risk management and operational efficiency. Many institutions already use compliance and risk technologies, fraud detection systems, and data analytics. Four in ten plan to adopt AI‑driven knowledge management, while a similar number are planning to introduce workflow automation. AI and real‑time payments stand out as the technologies most closely watched for their potential impact.
For CFIs, the opportunity lies not only in adopting new technologies but in prioritizing and tailoring investments to institutional needs. Equally important is the need to strengthen the value of existing systems and direct resources toward selective technology initiatives that produce tangible, measurable outcomes.
Elevating the Employee Experience
The ability to acquire and retain top talent continues to challenge CFIs. They are increasingly competing with fintechs and large banks for talent, while facing a shortage of digitally skilled talent alongside rising compensation and replacement costs. These pressures are compounded by the broader transformation of the workforce that’s being driven by rapid technological change, demographic shifts, and evolving employee expectations.
To compete for talent, respondents are prioritizing employee engagement, improving compensation packages, and investing in leadership development and learning opportunities. Flexible work, mentorship, and recognition programs play supporting roles. What’s more, nearly one‑third of surveyed leaders identified hiring a new executive as their best decision in the past year — emphasizing the importance of recruiting and retaining the right leadership to support and advance organizational goals.
In today’s complex and shifting environment, CFIs need to balance their growth ambitions with the wide range of demands and risks they face. To succeed, they must focus on their core strengths while strategically investing in technology, talent, and products that directly support their key goals and objectives. By aligning resources with their most critical priorities, CFIs can build resilience, drive innovation, and position themselves for sustainable growth.
