OCC’s 2024 Annual Report: The OCC Calls for a Resilient Banking Future

The Office of the Comptroller of the Currency (OCC) has released its 2024 report on the state of the federal banking system, shedding light on both the sector’s ongoing stability and the evolving challenges that lie ahead. While the financial system remains resilient overall, the report underscores the need for vigilance as banks navigate both traditional and emerging risks.

As we close out fiscal year 2024, the health of the banking system remains solid, with banks continuing to show resilience in the face of an ever-changing landscape. OCC officials are quick to point out, however, that the road ahead is anything but certain.

“We cannot afford to become complacent,” said Acting Comptroller Michael J. Hsu in his remarks. “The banking sector faces a constantly shifting set of risks—everything from cyber threats to economic volatility—and we must stay proactive in our efforts to maintain public trust.”

With financial markets responding to everything from global economic shifts to digital disruption, the OCC is stepping up its oversight. Banks are expected to continuously assess and manage their risks, not just the ones they are aware of today, but those that could surface in the future.

Focus on Operational Resilience & Recovery

One of the key areas of concern highlighted in the report is operational resilience. As we saw last year, banks must be able to withstand not just typical market fluctuations, but also sudden shocks like cyberattacks, natural disasters, and unforeseen operational challenges.

The OCC’s proposal to broaden recovery planning guidelines—now covering all large, insured banks with assets over $100 billion—marks a significant step toward ensuring that financial institutions can recover from disruptions without undermining the broader stability of the system. Additionally, with third-party services increasingly playing a critical role in banking operations, ensuring these entities are also resilient is becoming an urgent priority.

“Banking is no longer just about internal processes,” Hsu explained during a recent Senate testimony. “It’s about the entire ecosystem—banks and their partners—and ensuring that every link in the chain is prepared for whatever might come.”

Regulatory Changes: Mergers, AI, & More

2024 has also brought a slew of regulatory updates aimed at streamlining processes and addressing emerging risks. Perhaps most notably, the OCC finalized a rule strengthening procedures for bank mergers. This move is designed to ensure that any merger benefits not just the institution but also the competition and the communities served.

The focus is not only on maintaining fair competition but also on ensuring financial stability in the process. For example, when large banks merge, the OCC’s evaluations will consider whether the merger is pro-competitive, pro-community, and pro-stability—ensuring that consumers don’t lose out in the name of consolidation.

The rise of artificial intelligence in banking also took center stage in the report. While AI offers a wealth of opportunities, particularly in areas like credit decision-making, it also poses new challenges—particularly around fairness, accountability, and transparency. In 2024, the OCC hosted a forum to discuss these issues with industry leaders, emphasizing the importance of building robust governance frameworks to manage the growing use of AI in financial services.

Global Collaboration & Security Concerns

The OCC’s efforts extend beyond U.S. borders, with international collaboration playing an increasingly important role in the regulation of global banking operations. Through partnerships with organizations like the Basel Committee and the Financial Action Task Force, the OCC works to align U.S. banking regulations with global standards, which is especially critical as large U.S. banks continue to expand internationally.

In a related development, cybersecurity remains top of mind for the OCC as it monitors the evolving threat landscape. Banks, particularly those with a global presence, are tasked with strengthening their cybersecurity frameworks to defend against increasingly sophisticated attacks. Given the interconnected nature of global financial markets, any breach can have far-reaching implications, making robust cybersecurity policies an integral part of the OCC’s supervisory strategy.

Looking ahead, the OCC has called on the banking sector to continue adapting to new risks and challenges. As the financial landscape grows more complex with technological advances, evolving customer expectations, and global disruptions, resilience—both operational and financial—must remain a top priority.

The 2024 report paints a picture of a strong system that is not resting on its laurels. Rather, it is actively adapting to a new era of digital finance, regulatory change, and global cooperation. As the financial world turns, the OCC’s message is clear that the job is far from finished, and the work to protect the integrity and stability of the system is ongoing.

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