Navigating Risk and Opportunity: Key Takeaways from the 2025 S&P Global Community Bankers Conference

At a time when the operating environment for community banks is being reshaped by economic uncertainty, technological disruption, and shifting regulatory expectations, the 2025 S&P Global Community Bankers Conference served as a timely forum for candid dialogue and strategic insight. Here are the top takeaways that every bank executive and risk leader should bring back to their institution.

1. Economic Pressure Is Building—Resilience Will Be Tested

While the economy continues to show pockets of strength, the broader picture is increasingly complex. Consumers are grappling with inflation, higher borrowing costs, and dwindling savings. Delinquencies, particularly in credit cards and auto loans, are on the rise. On the commercial side, elevated rates are straining affordability and creating headwinds for real estate valuations.

Of particular concern is the looming reset of commercial loan portfolios, which could lead to elevated risk across sectors, especially in markets still impacted by remote work trends.

Risk leaders must be proactive. That means enhancing credit surveillance, refreshing downside scenarios, and maintaining discipline in underwriting and portfolio concentration.

2. Community Banks Are Holding Steady—But the Margin for Error Is Narrowing

Despite volatility, community banks are navigating the environment with stability. Deposit pricing remains competitive, credit losses are manageable, and capital levels are generally strong. However, performance metrics are showing signs of compression. Earnings growth is subdued, and return expectations are being revised downward across the industry.

Strategic clarity, conservative balance sheet management, and an enterprise view of risk will be essential as community banks continue to operate in a margin-squeezed environment.

3. AI and Automation Are Moving From Experiment to Execution

A clear theme throughout the conference was the shift from AI curiosity to real-world implementation. Banks are increasingly integrating AI into core operations from credit decisioning and fraud detection to marketing and customer experience. The conversation is no longer about "if" but "how" to scale these tools safely and strategically.

Successful adoption depends on three things:

• Clear governance frameworks that include model validation, human oversight, and risk-based scoring.
• Cross-functional collaboration between IT, risk, compliance, and business units.
• Upskilling talent so that staff, from underwriters to frontline bankers, can work effectively with AI-enhanced tools.

As these technologies become foundational to banking operations, the institutions that lead will be those that treat AI not as a bolt-on solution, but as an integrated part of enterprise strategy.

Final Thought: Risk Teams Are Strategic Enablers

The conference underscored a pivotal truth: as the landscape shifts, the role of the risk function is evolving. Risk leaders are no longer just gatekeepers; they’re strategic partners guiding institutions through disruption.

Whether managing credit exposure, preparing for macroeconomic shifts, or shaping responsible AI deployment, the future of community banking will be defined by those who can anticipate change and act with clarity.

Now is the time to align your risk strategy with your growth ambitions. And to ensure your tools, like SRA Watchtower, give you the clarity to move with confidence. Contact Shawn Ryan or Ted Gibson to learn how your peers are leveraging SRA Watchtower to offer a holistic picture of risk and provide better clarity to make decisions with confidence.