CSBS Releases 2022 National Survey of Community Banks

According to the Conference of State Bank Supervisors’ (CSBS) 2022 annual National Survey of Community Banks, community bankers across the nation ranked net interest margins, economic conditions and loan demand as their highest external risks. Inflation was described as a persistent, but manageable challenge. Meanwhile, cybersecurity remains the top internal challenge, although it dropped by 16% from last year as a very important risk, perhaps indicating banks are more prepared. Despite these challenges, community bankers reported they expect the strength of relationship-based lending to expand more than transactional lending.

The complete survey can be found on the CSBS website at: https://www.csbs.org/2022-csbs-national-survey-community-banks

Other key findings and insights from the 2022 survey include:

  • While net interest margins ranked first in importance among external risks, they were not considered more worrisome than a year ago. 
  • Cybersecurity ranked first in importance among internal risks, as well as in current and future technological challenges. 
  • Inflation was described as a persistent, but manageable, challenge. 
  • The percentage of bankers who said adoption of new technology is extremely important doubled in the last three years. 
  • Although cryptocurrency services are offered by only 1% of surveyed banks, bankers are equally divided on whether such services are important or unimportant. 
  • Community bankers are worrying less about competitive risks than they did a year ago. 
  • Compliance costs at community banks continued at levels that have persisted for several years. 
  • In-house provisioning of core processing services, compared with services provided externally, was viewed by bankers as cheaper but less secure.