OCC Seeks Input on Challenges Facing Community Banks in Digitalization

The Office of the Comptroller of the Currency (OCC) is seeking insight into how community banks are adopting digital technologies and the specific challenges they encounter.

The regulator has issued a request for information on the main challenges and barriers community banks face when adopting and implementing digital banking solutions.

The aim is to help the OCC gain a deeper understanding of the specific obstacles community banks face as they work to modernize operations, improve customer experience, and stay competitive in an increasingly digital financial services landscape.

The request for information invites community banks, industry groups, technology providers, and others to respond to questions such as: What types of up-front and ongoing costs and resources are involved in pursuing a digitalization strategy? And to what extent do community banks rely on third parties to implement digital initiatives?

It is also seeking input on how regulatory and compliance requirements influence decisions to pursue digitalization strategies, and how community banks manage the ongoing risks that may result in material financial risks.

The move follows a joint call from financial services trade associations urging the President’s Working Group on Financial Markets to support efforts to remove barriers preventing financial institutions from engaging in digital asset activities.

In a joint letter, the associations acknowledged progress by the Federal Reserve, FDIC, and OCC in rolling back policies and guidance that had limited banks’ ability to engage with digital assets. However, they urged regulators to go further, outlining additional steps the agencies could take to promote greater innovation in banking.

They specifically recommended establishing consistent rules across agencies, focusing regulation on activities rather than the underlying technology and setting clear expectations for risk management.