Credit Risk
Credit risk is rising amid economic pressures, with concerns about commercial real estate exposure, especially in office spaces, and the impact of higher interest rates on consumer and small business lending. Banks should intensify portfolio stress testing and closely monitor repayment trends to safeguard against potential credit deterioration.
Source: OCC Semiannual Risk Perspective Fall 2024
Market Risk
Market risk continues to be influenced by volatile interest rates, geopolitical uncertainties, and inflationary pressures. Banks must strengthen their risk measurement systems, improve stress testing for their portfolios, and stay agile in responding to market shifts to protect their financial positions and maintain stability.
Source: OCC Semiannual Risk Perspective Spring 2024
Operational Risk
Operational risks are growing due to increasing reliance on complex third-party relationships and evolving threats to business continuity. Banks face challenges in managing vulnerabilities across their ecosystems. Strong governance, real-time monitoring, and enhanced operational resilience strategies are critical for navigating these risks effectively.
Source: OCC Semiannual Risk Perspective Fall 2024
Compliance Risk
Compliance risk is intensifying as regulators increase scrutiny, especially in areas like BSA/AML and fair lending practices. The complexity of new regulatory expectations demands proactive oversight, better resource allocation, and investment in compliance technology to manage risks effectively while avoiding penalties.
Source: OCC Semiannual Risk Perspective Fall 2024
Special Topic – Increased External Fraud Activity
The 2024 Spring Semiannual Risk Perspective (SARP) special topic highlights that external fraud is surging, with bad actors targeting the federal banking system through increasingly sophisticated methods, including phishing, ransomware, and synthetic identities. Banks must strengthen fraud detection and prevention systems, enhance employee training, and invest in robust cybersecurity frameworks to protect customers and critical operations.
Source: OCC Semiannual Risk Perspective Fall 2024
Cybersecurity
Cybersecurity remains a top concern as attacks grow in scale and sophistication. Ransomware, phishing schemes, and attacks on third-party vendors are key threats. Banks must prioritize robust incident response plans, continuous monitoring, and employee awareness training to reduce vulnerabilities and ensure preparedness for evolving cyber risks.
Source: OCC Semiannual Risk Perspective Fall 2024
Innovation & New Products
The rapid pace of innovation is reshaping banking, with new products and services like digital currencies and real-time payments gaining traction. While these bring opportunities for growth, they also introduce new risks. Banks must balance agility with strong risk management, conducting thorough evaluations to ensure regulatory compliance
and operational stability.
Source: OCC Semiannual Risk Perspective Fall 2024
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