Ransomware Prevention for Community Banks

As community banks become more sophisticated digital operations, and as their customers increasingly interact with them in cloud-based spaces, cybersecurity concerns are a headache that’s not going away. Those concerns include threats of ransomware, where a hacker digitally breaks into a company and shuts down its systems until the hacker gets paid. 

But there is good news on this front. 

While ransomware might still be a problem, community banks have successfully fought back and continue to stay on top of this ever‑evolving threat. 

“Community banks hold sensitive financial data and personal information, which make them high-value assets, especially in the U.S.,” says Anjelica Dortch, ICBA’s vice president of operational risk and cybersecurity policy. “But community banks have done a really good job in 2025 and showed they’re a trusted, safe and sound provider to their communities.” 

Here’s what community bankers need to know to keep that trend going for 2026.

How ransomware attacks are evolving for community banks

According to a report from the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, ransomware incidents and payments reached an all-time high in 2023, with 1,512 incidents leading to about $1.1 billion in payments. In 2024, incidents decreased slightly to 1,476, with payments clocking in at $734 million (2025 data was not available as of print time).

There was also a drop in the amount per incident extorted from organizations at the end of 2025. Coveware, a cyber extortion response company, found that the average ransom payment dropped 66% to $376,941 from the second to third quarter of the year.

It’s good news, but attacks are still happening, and they might now be double pronged, says Zach Duke, CEO and cofounder of Finosec. That’s because once attackers are successful inside, they have access to valuable data like customers’ personal information. 

“They’ll not only install ransomware, but they’ll take that data before they do the ransom,” Duke says. He notes that thieves try to steal as much data as they can before they make a bank aware of their demands.

How AI is powering more sophisticated ransomware and phishing attacks

Threat actors are working hard to make their attempts to get into banks and their vendors more effective through the use of artificial intelligence. The technology makes it “easier for [threat actors] to create, populate and facilitate things,” says Duke.

That’s especially true with phishing attacks, which use someone’s personal information to try to steal their login credentials. If a hacker gets hold of those, they could have the keys to the kingdom if threat detection tools don’t sense the intrusion first.

AI is being used on multiple fronts to create more sophisticated attacks. The technology can make emails look more legitimate, meaning poor grammar is no longer an easy way to spot a scam. AI can be used for better and wider scrapes of the internet to find more personal details about a person so the email seems real. Because of AI, hackers can ramp up the sheer volume of emails they send. They can also use AI to clone someone’s voice or even their image to pretend to be a real person who works at the bank rather than relying solely on email.

Hackers are also applying these AI-fueled techniques to try to wriggle into community banks through third-party vendors. They’re doing so because they’re going after what they perceive to be low-hanging fruit, which community banks aren’t anymore, says Michael Manske, director of cybersecurity consulting at West Monroe, a global business and technology consulting firm. 

“Banks are putting in more protections, so ransomware shifted to ‘Let’s go attack your vendors and see if you can get in a different way,’” he says.

Ransomware Prevention Strategies for Community Banks

While ransomware is evolving, methods of preventing successful attacks are also evolving. 

That includes tried-and-true methods of requiring multifactor authentication, employee awareness and training programs and a from-the-C-suite-down attitude that security is fundamental to the success of the organization. 

“I think we underestimate the value of education and practice and really having that risk mindset in the culture of the bank,” says Amy Radue, vice president of risk at UFS, a technology company that offers IT services and consulting for community banks. “The more we talk about it and [are] aware of how we spot these things, it becomes second nature, and we’re just that much more protected.”

Community banks are also fighting fire with fire, Radue adds, and using it as part of security measures. For example, banks are using AI to create better and more efficient threat detectors, incident-response programs and detection tools, so that if there is a breach, they can detect and squash it faster than they could before.

Creating plans on what to do if a breach happens, and then working through that scenario through tabletop exercises, is still incredibly effective, says Manske. That includes every person who has a responsibility, from an IT employee to the executive level. “It’s always eye-opening when I conduct these [exercises],” he says.

Community banks are also doing a better job at scrutinizing the security stances of their third-party vendors and limiting who has access to different parts of the institution’s digital infrastructure, says Duke.

Focusing security on high-risk employees and access can help banks more effectively use security resource funds, Duke says. 

If, for example, a bank employee works from home and is authorized to approve multimillion-dollar wires, it’s going to be a bigger deal if that employee fails regular cybersecurity training exercises than it would be if a bank teller whose machine never “leaves the four walls of the bank” failed them, Duke notes. 

How Community Banks Can Strengthen Cybersecurity in 2026

Community banks are not alone in this fight, as the declining value per ransomware incident shows. Dortch highlights efforts from law enforcement—both in the U.S. and internationally—to “disrupt their business model, increase prosecution and better internal cooperation.” Federal agencies like the Federal Bureau of Investigation, Federal Deposit Insurance Corporation, Cybersecurity and Infrastructure Security Agency and Treasury Department are also working to fight ransomware attacks. 

Better communication among cybersecurity insurance providers is also helping community banks “get involved to help mitigate these issues as quickly as possible,” which makes any successful intrusion less potent, says Dortch. 

Overall, community banks have worked hard to keep pace with these ever-evolving attacks, she says, especially considering that they might not have the same kinds of budgets as larger institutions and are often working with multiple vendors to build and protect their infrastructure. 

As Dortch says, “Community banks are out here crushing it the best way that they can.”

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