AI is one of several key issues facing banks surveyed in the report released Thursday (May 7).
“Artificial intelligence is significantly transforming the cyber threat landscape, while also providing new capabilities to manage cyber-related risks,” the OCC said in the report.
The regulator recommended that banks mitigate AI-enabled cyber risks by implementing more stringent security measures, including multifactor authentication and timely patch management; deploying AI to defend against threats; and understanding the potential benefits and risks of the increasingly advanced AI tools that are entering the market.
The OCC also highlighted the opportunities for innovation with AI. It said in the report that banks have used forms of AI for many years and are now exploring the use of generative AI and agentic AI. Early use cases of these new forms of AI focus on productivity and customer service.
The regulator said it is essential that banks maintain appropriate governance and risk management when implementing AI and that the industry has already done so with traditional AI.
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“The OCC supports responsible innovation, such as through gen AI and agentic AI, as a means of modernizing the financial system and ensuring that banks of all sizes remain relevant and competitive,” the regulator said in the report.
The International Monetary Fund also addressed cyber risk and the importance of cybersecurity in a blog post published Thursday. The IMF said existing cybersecurity measures must be expanded and sharpened because attacks are becoming faster, automated and more sophisticated.
Surveying other issues affecting banks, the OCC said in its report that bank earnings improved in 2025, balance sheets remain strong, and bank performance has been underpinned by a U.S. economy that exhibited moderate growth in 2025 and is expected to continue to grow in 2026.
In credit risk, the OCC said three areas that warrant monitoring are commercial real estate lending, private credit markets and consumer borrowers with weaker credit scores. But credit risk remains manageable, it said.
Bank compliance systems may be strained as geopolitical tensions increase sanctions and money laundering risk, the regulator said.
“The OCC continues to look for opportunities to tailor bank supervision and regulations to risk and complexity so that banks can direct more attention and resources toward higher-risk customers and activities,” the regulator said in the report.
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