Community banks and credit unions face familiar challenges in 2026: higher account holder expectations, rising risk, evolving fraud, tight margins and increased competition from national banks and fintechs. At the same time, the operating backdrop is improving in some areas: FDIC data shows industry earnings improved in Q3 2025, with deposits rising for a fifth straight quarter.

CSI’s 2026 Banking Priorities survey of bank and credit union leaders shows that financial institutions are focused on funding what keeps them competitive: modern platforms, stronger security and automation that enables them do more with less.

Below, we count down the five most-cited strategic priorities from the survey, and why they’re receiving the most focus. 

#5: Customer Support Improvements

Customer support improvements landed in the top five because “pretty good” service isn’t enough anymore.

Consumers don’t separate “digital” from “human;” they expect both to work seamlessly. And they’re quicker than ever to compare experiences across banks, fintechs and apps. 90% of banking leaders agree their account holders are engaged on and using digital channels, and 91% still believe the branch will remain relevant for at least the next 10 years. In other words, customers are using both channels, so support has to work end-to-end, with fewer handoffs and consistent answers and experiences across each touchpoint.

These expectations are also tied directly to the fierce battle for deposits. Consumers are banking with multiple institutions, and loyalty isn’t what it used to be. A 2025 JD Power Financial Services Churn Data and Analytics report found that among consumers who already had a checking account, 72% were opening new checking accounts at a different bank. While this isn’t necessarily outright attrition, it can weaken primary financial institution status—reducing deposit balances, card usage and future cross-sell opportunities

In spending terms, that translates to investing in:

• Better digital self-service, for status updates, disputes and card controls
• Contact center tools that reduce repeat calls and increase resolution speed
• Smoother account opening and onboarding, to prevent attrition
  

In short, if your support experience is confusing, slow or frustrating, you’re giving account holders an easy reason to switch. Investment in customer service improvements can strengthen relationships, increase long-term account profitability and improve retention.

#4: Market Expansion

Market expansion remains a constant goal for financial institutions, but this year the focus is shifting from quantity to quality. That means strengthening primary relationships so account holders are more likely to deposit funds, use debit cards and adopt additional services.

The 2026 Banking Priorities survey shows it also means focused growth efforts:

• 92% of bankers surveyed agree their institution is growing its existing customer base
• 82% say they’re focused on increasing retail deposits
• 86% say they’re focused on increasing commercial

Credit unions, in particular, are prioritizing market expansion, ranking it 16 percentage points higher than community banks in the survey. This is supported by NCUA’s Q3 2025 report, which shows median membership declined 0.5%, and 55% of federally insured credit unions reported having fewer members than the previous year. When member growth is stalled, spending naturally shifts from acquisition to retention, primacy and deposit growth.

The high cost of acquisition also plays a role in this shift. According to BAI research, the average cash incentive offered to attract new checking account customers is $277 — and frequent churn from promotion-seekers can drive costs much higher. Instead, a wiser approach for community banks and credit unions may be to explore the personal networks of their existing bases. A referral program is not only a much less expensive acquisition strategy, but it can also bring in higher-value account holders when done correctly.
In practice, spending on market expansion tends to include:

• Smarter deposit acquisition, through tighter targeting, more strategic offers and fast, seamless onboarding to drive more usage, including debit card swipes.
• Retention and primacy focus, through direct deposit capture, better day-to-day value, and fewer reasons to leave.
• Commercial relationship growth, through winning more of a business’s everyday banking, not just the loan.

#3: Operational Efficiency

Tight margins and rising expectations are forcing banks and credit unions to streamline operations. In CSI’s study, 74% of leaders said their processes could be more efficient, and 74% said they’d prefer to consolidate technology with as few providers as possible. Tool sprawl isn’t just expensive and hard to manage; it creates duplicate work that slows teams down and raises the risk of errors. That’s why efficiency spending is targeting automation and better workflows.

The study also shows efficiency drivers like automation and AI are the top tech investment priority this year. Data analytics/actionable insights and digital account opening tied for second place. Together, these investments help reduce manual work, streamline operations and generate faster, more actionable insights.

There are also differences between institution types. Community banks are nearly twice as likely as credit unions to recognize AI’s potential for back-office efficiency (38% vs. 21%). If credit unions continue to take a wait-and-see approach, they risk falling behind with more manual work, slower processes and higher operating costs while their peers move ahead with automation.

#2: Cybersecurity and Fraud Defense

Cybersecurity and fraud prevention have remained a top priority in 2026 as a matter of necessity. The cost of being unprepared, from monetary losses to loss of account holder trust, is much higher than it used to be.

AI is both part of the problem and part of the solution. Attackers are increasingly using AI to scale their scams, which look and sound more convincing than ever. Banking leaders rated AI-enhanced social engineering (such as voice cloning and QR-code phishing) 16 percentage points higher this year than last, making it the top cybersecurity concern. But 57% of respondents said cybersecurity is AI’s most valuable application.

Fraud and financial crimes are just as concerning. In the CSI study, card and check fraud remain the most common types of fraud, but close behind are phishing, wire transfer fraud, P2P fraud and fraudulent account opening. Phishing is particularly painful because it often happens outside the financial institution’s ecosystem. Microsoft research shows that AI-generated phishing emails can drive a 54% click-through rate vs. 12% for traditional phishing, which could make phishing up to 50x more profitable for criminals.

Assessments of readiness depend on who you ask. Among banking leaders surveyed by CSI, 83% say they feel well-prepared for a cyberattack. However, there’s a notable gap between banks (85%) and credit unions (72%). Meanwhile, some CSI experts caution that preparedness may be overstated and warn against overconfidence, given the escalating risks and sophistication of today’s scams.

Cybersecurity and fraud prevention spending is spread among many areas, including:

• Stronger login and identity verification controls to prevent phishing and account takeovers
• Improved fraud detection and response to identify suspicious activity sooner
• Tighter payment safeguards for checks, wires and other payment channels
• Practical scam awareness training that helps employees recognize and respond to real-world fraud attempts
• Better resilience planning, including system isolation, data backups, recovery testing and incident response rehearsals

#1: Technology modernization (the foundation everything else depends on)

Technology modernization ranks #1 among strategic priorities because it’s what unlocks everything else on this list (and more).

In CSI’s survey, prioritization rises sharply with institution size, from 31% at smaller financial institutions ($100M–$250M) to 59% at larger ones ($5B–$10B).

Modernization encompasses a wide range of projects. For most financial institutions, it’s a collection of initiatives that improve how systems connect, data flows and new capabilities are delivered across the organization. These efforts can reduce reliance on inflexible legacy systems that make change slow and expensive. That’s why many institutions are prioritizing integration and simplification: 93% of banking leaders say their institution is interested in customizing product offerings through technology integrations, and 74% prefer consolidating technology with as few providers as possible.

This need becomes even more apparent in commercial banking. Technology limitations or integration gaps were cited as the top barrier to expanding commercial portfolios. If data, onboarding, cash management and lending systems don’t connect well, it’s difficult to deepen relationships or deliver a smooth experience.

Regulators also want to see these improvements. The OCC has warned, “A lack of investment in new technologies, products, and services may present material risks to long-term bank performance and viability of institutions.”

Modernization spending will likely target:

• Cleaner integrations and data consistency, so changes don’t require months of custom work
• A simpler vendor environment with fewer tools, handoffs and headaches
• An easy-to-govern foundation, so security, analytics and fraud controls can scale more easily

Moving Forward in 2026

In 2026, the most effective institutions will align their spending with a broader strategy to protect the institution, improve the consumer experience and remove operational friction.

Read more about how financial institutions’ strategic priorities for the year in the 2026 CSI Banking Priorities Report.

Read the report