Community Banks are weighing increased demands in the year ahead and are facing difficult challenges in technology management, credit risk, and regulatory compliance, the Tenth Annual Community Bank Survey conducted by Risk Management Association (RMA) has found.

Community bank executives from more than 100 institutions note that the combined demands of technology costs, managing third-party vendors, reputational risk, and increasing regulatory pressures are pushing cybersecurity and technology risk to the top of the list. As the potential for recession looms, credit risk is also a top concern.

Over the years that RMA has conducted the Community Bank Survey, community bankers have registered increasing interest in cybersecurity and its relationship with other risks. In this year's survey, another operational risk—IT risk—is frequently cited as important, as community banks work to enable remote workforces and improve effectiveness through automation, in addition to managing data security and erecting defenses against cyberattacks.

With respect to credit risk, bankers who have experienced down cycles recognize that strong credit metrics may lag behind a looming reality and are bracing for what lies ahead.

Regulatory compliance also continues to be a major priority and challenge for community bankers, as they strive to address regulatory requirements amid persistent resource constraints. In this year's survey, the transition to the CECL accounting standard—occurring in January 2023 for many community banks—is a top challenge, as are cybersecurity-related compliance, small business data collection, and new rules connected to the Community Reinvestment Act (CRA).