Skip to main content

Looking for Valuant? You are in the right place!

Valuant is now Abrigo, giving you a single source to Manage Risk and Drive Growth

Make yourself at home – we hope you enjoy your new web experience.

Looking for DiCOM? You are in the right place!

DiCOM Software is now part of Abrigo, giving you a single source to Manage Risk and Drive Growth. Make yourself at home – we hope you enjoy your new web experience.

Looking for TPG Software? You are in the right place!

TPG Software is now part of Abrigo. You can continue to count on the world-class Investment Accounting software and services you’ve come to expect, plus all that Abrigo has to offer.

Make yourself at home – we hope you enjoy being part of our community.

AI AML/CFT Asset/Liability Data & Analytics Fraud Prevention Lending & Credit Risk Portfolio Risk & CECL

Go on offense: A turning point for community banks

Regan Camp
October 23, 2025
Read Time: 0 min

This article covers these key points: 

Regulatory changes provide a reason to shift from overly defensive postures

The new regulatory environment is a chance for community banks to reclaim market share. Five steps bank boards should consider right now. 

Regulatory momentum is building

At the Federal Reserve’s recent Community Bank Conference, one line of Treasury Secretary Scott Bessent’s reported remarks jumped out to me: it’s time for community banks to “go on the offense.”

That statement summed up what many of us in the industry have been thinking for a while. For years, community banks have been playing defense, navigating an ever-growing list of regulations, absorbing rising costs, and competing against institutions with far greater scale and resources.

Hearing Bessent’s message, paired with genuine signs that Washington may finally be ready to reexamine how those rules impact smaller institutions, felt both refreshing and overdue. This could be the start of something meaningful.

Expedite ROI and technology adoption. Access change management help.

Connect with an expert

An opening for a different approach

What stood out to me wasn’t just Bessent’s energy, but the substance behind it. Federal Reserve Vice Chair for Supervision Michelle Bowman reinforced the same theme: regulation should match the real risk profile of community banks, not the scale of megabanks.

That message has been missing for too long.

The conversation is starting to move toward right-sized supervision, with potential reviews of the Community Bank Leverage Ratio, clarity around what truly constitutes “unsafe or unsound” practices, and early steps toward streamlining anti-money laundering (AML) and reporting burdens. Regulators even seem open to addressing outdated core vendor contracts that some financial institutions say have limited their flexibility and innovation for years.

For community bankers, this environment is a real opening to do things differently.

Why bankers should act now

Community banks have always been the financial backbone of local economies. But the reality is, the ecosystem of financial institutions has been shrinking, through consolidation, cost pressure, and competitive encroachment from fintechs and non-bank financial institutions that play by different rules.

For years, the strategy of many community banks has been survival: comply, consolidate, or get creative.

Now, these institutions have an opportunity to do more than survive. If the tone coming from Washington holds and results in action, community banks will want to take the initiative–to invest, expand, and reclaim market share in the ways only community institutions can.

How community banks can play offense intentionally 

If I were sitting with a bank’s leadership team today, here’s what I’d challenge them to think about:

  1. Revisit your regulatory posture.

Don’t wait for reform to be finalized. Start mapping how changes to capital ratios, exam expectations, or AML guidance could impact your balance sheet and growth capacity. Position yourself ahead of the curve.

  1. Modernize your technology stack.

Technology is more about relevance than efficiency, given the competitive environment. In fact, Bessent said the community banks “that make it through the next 10 years will have embraced technology.” Evaluate where automation, analytics, or new integrations could free up capacity and create better customer experiences or increase staff ability to focus on insights, not inputs. For example, many banks are now pairing credit risk analysis and allowance modeling within unified systems, rather than juggling spreadsheets and disconnected tools or systems.

And if your core vendor is slowing you down, this might finally be the time to renegotiate.

  1. Pursue focused growth.

Identify and lean into what you do best: relationships and local insight. Whether tied to small business, ag lending, or a new niche, use data to identify where you can win. Growth without focus is a risk. Growth with focus is power.

  1. Strengthen compliance through modernization.

Community banks take seriously the importance of discipline and compliance. But compliance can be smarter. At Abrigo, we see more banks integrating risk rating, stress testing, and concentration management into their CECL and portfolio analytics workflows, not as regulatory checkboxes, but as tools for stronger decision-making.

Automate the routine tasks, align processes to material risk, and prepare your teams for evolving threats like cyber and AI-related fraud.

  1. Tell your story.

Now is the time to remind your communities and policymakers why community banking matters. Be visible, be vocal, and help shape the conversation about what “right-sized” really looks like.

Keep perspective

I’ve spent much of my career working with community banks through periods of dramatic change. And one thing I’ve learned is that the ones that thrive are those that prepare while others wait.

If this new regulatory era does take shape, those who have already aligned capital, compliance, and technology around a clear strategy will be the ones defining the future rather than reacting to it.

At Abrigo, our team is helping banks define their future. By combining data, credit risk modeling, and portfolio management tools with strategic banking advisory services, institutions are strengthening their earnings and readiness.

We all understand that even with momentum, reform doesn’t happen overnight. And political shifts can occur quickly. In addition, field exam consistency often lags behind new guidance. And yes, modernization brings its own risks (e.g.; vendor challenges, cyber concerns, execution pressure, etc.).

But for the first time in a long time, the tone from the top isn’t “hold the line.” It’s “move forward wisely.”

That’s a message every community banker can rally around.

The opportunity is real. The timing is right.

It’s time to go on offense.

See how Integro Bank advanced its allowance model with help from Abrigo.

Read more
Webinar

How to improve balance sheet strategy with integrated risk and financial management

Read More
Webinar

Scenario planning for liquidity and financial strength

Read More
Webinar

Modeling deposits to enhance ALM resilience

Read More
About the Author

Regan Camp

Vice President, Portfolio Risk Sales and Services
Regan Camp is Abrigo’s Vice President of Portfolio Risk Sales and Services, leading a team of subject matter experts who assist financial institutions in accurately interpreting and applying federal accounting guidance. He began his career in financial services as a commercial loan officer at a $2.1 billion institution. He then

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.