Annual survey reveals how financial institutions are preparing for emerging risks and shifting technology demands
PADUCAH, Ky.–(BUSINESS WIRE)–CSI, a leading provider of end-to-end financial software and technology, today released its 11th annual Banking Priorities Executive Report. The 2026 survey of 252 financial institution leaders reveals that artificial intelligence has become both the industry’s greatest source of optimism and its most pressing concern—with AI-enhanced social engineering attacks emerging as the leading cybersecurity threat.
For the third consecutive year, AI ranked as the top technology trend—cited by half of all respondents and outpacing digital assets (20%), digital transformation (11%) and real-time fraud detection (8%). The finding reflects an urgent reality: Eighty-five percent of respondents agree that institutions adopting AI will gain a significant competitive advantage as concerns about AI-powered fraud, deepfakes and voice cloning are reshaping the threat landscape.
“Community financial institutions are facing a pivotal moment where AI represents both the path forward and a new category of risk,” said Nancy Langer, president and CEO of CSI. “The institutions that will thrive are those treating AI as a strategic imperative that rewards flexibility and personalization over sheer scale, uniting the right technology with the relationship-driven approach that has always set community banking apart.”
Banks are nearly twice as likely as credit unions to recognize AI’s potential for back-office efficiency (38% compared to 21%), suggesting a gap in operational readiness that credit unions will need to address. Priority use cases include fraud detection, data analytics, customer service automation and efficiency gains across core operations.
Additional findings from the 2026 report include:
Community banking confidence remains steady: Despite intensifying competitive pressure from fintechs, digital-first challengers and larger banks, community financial institutions remain confident in their future. More than 86% of respondents expressed optimism about the outlook for community banking, and 91% believe branches will remain relevant for the next decade—a finding that challenges popular digital-only narratives and underscores the enduring value of relationship-based service. However, confidence in community banking’s future varies by asset size: Institutions under $1 billion expressed more tempered outlooks amid tighter budgets, limited technology resources and increased M&A activity, while larger institutions remain nearly universally confident.
Strategic modernization accelerates: Financial institutions view technology modernization as a foundational priority for 2026—though urgency increases with size. Among institutions with $5 billion to $10 billion in assets, 59% ranked modernization as a top priority, compared to 31% of those under $250 million.
Cybersecurity concerns shift to AI-powered threats: AI-enhanced social engineering attacks—such as voice cloning and QR code phishing—jumped 16 percentage points to become the leading cybersecurity concern for 2026. In response, institutions are turning to AI itself as their primary defense, with 57% citing cybersecurity as AI’s most valuable application. While 83% of respondents feel well-prepared for a cyberattack, a notable gap exists between banks (85%) and credit unions (72%)—a disparity that warrants attention as threats become more sophisticated.
Digital assets enter the mainstream conversation: Digital assets—including stablecoins, tokenized deposits and cryptocurrencies—ranked second among technology developments bankers expect to shape the industry, cited by 20% of respondents. As regulatory frameworks take shape and consumer interest grows, financial institutions are beginning to evaluate how these emerging capabilities fit into their long-term strategies.
“What we’re seeing is a fundamental shift in how community banks and credit unions approach technology—from reactive upgrades to strategic investments that position them to compete with institutions of any size,” Langer added. “The data tells a clear story. The institutions succeeding aren’t just adopting new tools, they’re building the operational foundation to use them effectively while managing the risks that come with rapid change.”
Independent research firm CITE Research conducted the survey on behalf of CSI, distributing it to financial institution leaders throughout October 2025. Respondents were screened to work at a bank or credit union, hold a manager-level position or above and represent an institution with assets between $100 million and $10 billion.
Access the full report here and join CSI’s webinar at 11 a.m. CT Monday, Feb. 9 to hear company experts break down key findings and competitive strategies for 2026. For more information on CSI, visit csiweb.com.
About CSI
As a forward-thinking software provider, CSI helps community and regional financial institutions, as well as organizations worldwide, solve their customers’ needs through open and agile technologies. In addition to its 60-year reputation for personalized service, CSI is shaping the future of banking by swiftly deploying advanced solutions that help its customers rival their competition.
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