The Top 5 BSA/AML Challenges Community Banks Must Prepare for in 2026

Community banks enter 2026 facing a compliance landscape unlike any in recent memory. Fraud is rising, exam expectations are expanding, and BSA/AML teams—especially those operating with lean staffing—are being pushed to manage more alerts, more documentation, and more risk with the same resources.

During our recent Finovifi BSA/AML webinar, our guest expert highlighted several trends that every institution should be preparing for right now. Below are the five insights that matter most as we move into a new regulatory cycle.

1. Fraud and AML Are Colliding—and Siloed Systems Are a Liability

Fraud activity increasingly mirrors AML typologies, and AML anomalies increasingly begin with fraud behavior. Mule accounts, synthetic IDs, deposit fraud, and rapid funds movement now sit at the intersection of both domains.

When institutions use separate systems for fraud and AML, critical context is missed. Investigations slow down, risk escalates, and examiners notice the operational drag. In 2026, banks will need technology that lets fraud and AML teams work from the same source of truth—not parallel workflows.

2. SAR Filings Have Flattened, but Suspicious Activity Has Not

Suspicious activity continues to rise. Yet across the industry, SAR filings have plateaued.

This isn’t a reduction in crime; it’s a symptom of workload. Alert queues grow faster than analysts can resolve them. Documentation takes too long. Routing and triage lack standardization. And many banks simply don’t have the staffing to keep pace.

Regulators are paying attention. They know teams are overwhelmed, and in 2026 they will expect clearer logic, cleaner narratives, and evidence that institutions have modernized their review process.

3. The Real Challenge Isn’t Regulation—It’s Time

The BSA/AML burden is no longer just about the volume of regulation. It’s about the hours required to manage it.

Common pain points we heard from institutions:

• Slow, manual alert review
• Multiple systems required to complete a single case
• Repetitive data entry
• Inconsistent documentation
• SAR narratives built from scratch every time

One comment from the webinar stood out:
“Most banks aren’t under-regulated—they’re under-automated.”

Automation is becoming the only sustainable way community banks can maintain compliance without continually expanding staff.

4. Fraud Is Accelerating in the First 30 Days of New Accounts

Deposit fraud, mobile deposit scams, and account mule activity are reshaping the risk profiles of customers—especially early in the relationship.

Key shifts:

• The first 30 days of an account now carry significantly higher fraud risk
• Mobile and ATM deposits show disproportionate fraud activity
• Synthetic identities bypass traditional onboarding controls
• Transaction behavior matters more than static onboarding data

Static CDD/EDD models simply cannot evaluate today’s risks. Banks must adopt ongoing, behavior-driven risk monitoring.

5. Modern Technology Is Becoming an Expectation, Not a Luxury

Examiners understand staffing shortages. They also expect banks to compensate with technology that improves consistency, auditability, and documentation.

Community banks need:

• Automated evidence logs
• Risk-based alert prioritization
• Unified case management
• Clear investigation trails
• Integration across fraud, AML, and sanctions

This is the direction the industry is moving—and the reason Finovifi is launching BSA Guardian in January 2026.

Built for community banks, BSA Guardian brings together machine-learning transaction monitoring, real-time sanctions screening, dynamic customer risk scoring, integrated case management, and automated SAR assistance in a single platform. It gives lean BSA/AML teams the structure, intelligence, and efficiency needed to manage rising regulatory demands without adding unnecessary complexity.

Preparing for 2026 Starts Now

The institutions that thrive this year will be the ones that modernize proactively—not reactively.

To recap, the most important steps for 2026 are:

• Close the gap between fraud and AML workflows
• Strengthen SAR documentation and consistency
• Reduce manual work through automation
• Shift from static risk scoring to adaptive monitoring
• Adopt systems that provide unified visibility and audit-ready reporting

Community banks don’t need more pressure. They need more capability—and Finovifi is committed to delivering exactly that.