For the first time in five years, the regulatory burden isn’t at the top of bank CEOs’ list of worries, according to What’s Going on 2016: Cornerstone Advisors’ Take on Community Bank and Credit Union Priorities and Technology Plans. Instead, their biggest concerns are loan demand and the interest rate environment.

The findings are based on a survey of 231 executives from community banks and credit unions conducted by Cornerstone Advisors.

Nearly two-thirds of executives cited loan demand as a top concern for 2016 compared to 44% in 2015. “Bank CEOs feel increased pressure from a heavily competitive lending market,” observed Ron Shevlin, research director at Cornerstone Advisors.

In addition to the focus on growing their lending businesses, this year nearly twice as many banks as did last year will look to non-traditional lines of business (insurance, trust, and wealth management) and commercial customers for growth opportunities. Many credit unions, on the other hand, will look to improved sales and marketing methods as a source of growth.

Four in 10 credit union CEOs cited mergers as a 2016 growth priority, a sharp increase from previous studies and the highest percentage seen in the study’s five-year history. Cornerstone Advisors predicts that realizing merger and acquisition benefits in 2016 will be “very difficult” for credit unions.

Online and mobile banking top the list for technology initiatives in 2016. More than 40% of surveyed institutions will improve the utilization of, replace, or add new digital channel systems in 2016. “Social media and personal financial management technologies appear unable to hold the attention of banks and credit unions, as they expressed noticeably less interest in investing in these applications this year as compared to 2015,” Shevlin said.

Despite CEOs’ focus on lending as a source of growth, study authors were surprised to see that improvements and/or replacements to lending systems were not ranked highly as technologies needing attention in 2016. “Considering the importance of lending as a growth driver and the improvement of turnaround times at big banks,” the report states, “we’re concerned that community banks are still slow to adopt loan origination systems for faster turnarounds, improved risk management, and a more streamlined approach.”

The research in What’s Going on 2016: Cornerstone Advisors’ Take on Community Bank and Credit Union Priorities and Technology Plans stems from a combination of survey results and the analysis of hundreds of community bank and credit union consulting engagements performed by Cornerstone Advisors.

Founded in 2002, Cornerstone Advisors, a management consulting firm focused exclusively on mid-size banks and larger credit unions, provides customized solutions designed to assist financial institutions with their Performance, Strategy, Technology, Contract, Payment and Channel initiatives. Cornerstone publishes GonzoBanker, an industry blog, as well as a variety of white papers and research reports. Cornerstone also hosts GonzoBanker Roundtables for bank and credit union executives.