Introduction

The June 2025 Beige Book revealed a sharpening set of economic pressures: softening growth, rising input costs, cautious hiring, and tariff-driven volatility. For Community Banks, these signals are upstream forces that can expose real gaps in enterprise risk management.

How These Pressures Can Lead to Heightened Examiner Focus

The Beige Book’s signals align closely with the areas examiners are already scrutinizing. As these pressures grow, expect deeper inquiry not only into credit and liquidity, but also into:

• Whether third-party risk assumptions reflect vendor instability or cost pass-throughs
• How operational staffing and resource allocation are being adjusted for shifting volumes
• What steps compliance and audit teams are taking to localize monitoring and controls 
• Whether BSA/AML programs are recalibrating thresholds and alerts for behavioral shifts

How iKinetiq Helps Community Banks Respond

At iKinetiq, we built our TPOC Risk Framework to help banks translate broad economic signals into targeted exam readiness. We connect the Beige Book’s upstream pressures to four core areas that examiners probe:

• Third-Party Risk: Economic stress can trigger vendor delays, cost shifts, or service gaps demanding additional due diligence and contract oversight.
• Operational Risk: Flattened labor markets and slowing activity can stretch lean teams and degrade controls. Proactive staffing and continuity planning are key.
• Compliance Risk: Regional divergence increases the risk of misaligned assumptions. Monitoring and testing must stay current with real-time conditions.
• BSA/AML Risk: Transaction patterns are shifting. Institutions must adjust detection rules and alerts in real time to stay exam ready.

Final Takeaway: Economic Signals Are a Warning

When the economy shifts, risk failures are certain for banks that fail to adapt. The Beige Book is a call to act. Use it to demonstrate how your institution is proactively aligning risk management with evolving conditions.

Want to know where you stand? Let us show you how peer banks are tackling shifting risks.  👉 Schedule your free consult!

© 2025 iKinetiq Innovation Solutions, LLC. All Rights Reserved.