Risks Related to Artificial Intelligence and Emerging Technologies
Standard wording or passing mentionDetail: GeneralNew this year
Coastal Financial Corp
CCB · WA · Mid-size bank ($1B to $50B)
Total assets of FDIC-insured bank subsidiaries: $4.7B at the end of 2025
Filings on the SEC website · This bank on Bankgraph
In short. In its 2025 annual report, Coastal Financial Corp mentions AI in 13 passages. It says it is using AI now, for operations. It lists AI as a risk and explains how AI is controlled. Compared with banks of its size, it gives more detail than most.
In the 2025 annual reportThe yearly report a listed company files with the SEC, called a 10-K. It describes the business, its risks and its results.
Mentions AI
Yes
13 passages
Highest detail levelHow specific a passage is about AI at this bank. General: could be in any bank's report. Names an area: says where AI is used or how it is controlled. Concrete example: names a tool or vendor, gives a number, a date or a result.
Names an area
What it says
Standard wording or passing mention; Sees AI as a risk; Using AI now
Kinds of AI named
Process automation, Machine learning
How AI is controlled
Model risk management, Vendor oversight
AI in its annual reports over time
- What this shows
- How many passages about AI each annual report contains, 2022 to 2025, by what they say.
- What it means
- 0 passages in 2022, 13 passages in 2025.
- How to read it
- Each bar is a report year, split by what the passages say. Hover or tap a bar for the count.
- Where it comes from
- Banks' annual reports (10-K) filed with the SEC, up to 6 Oct 2026. How we did this
Show as a table
| Report year | Using or planning AI | Explains how AI is controlled | Sees AI as a risk | Other mentions |
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Compared with banks of its size
- What this shows
- This bank's 2025 annual report next to all 221 banks of its size ($1B to $50B).
- What it means
- Its most specific passage is "Names an area"; for banks of its size the typical level is "General".
- How to read it
- Yes or no for this bank; the share of banks of the same size for comparison.
- Where it comes from
- Banks' annual reports (10-K) filed with the SEC, up to 6 Oct 2026. How we did this
| In the 2025 report | This bank | Banks of its size |
|---|---|---|
| Using AI now | Yes | 26 of 221 (12%) |
| Explains how AI is controlled | Yes | 55 of 221 (25%) |
| Sees AI as a risk | Yes | 184 of 221 (83%) |
| Mentions generative AI | No | 112 of 221 (51%) |
| Mentions AI agents | No | 18 of 221 (8%) |
What changed from 2024
13 passages new in the 2025 report, 1 passage from the 2024 report no longer there. The most specific passage is more detailed than last year.
Every passage about AI
- What this shows
- All 15 passages about AI in this bank's annual reports, quarterly reports and earnings materials since 2023, newest first.
- What it means
- 2 passages say the bank is using AI now.
- How to read it
- Highlighted words are the terms that matched. Labels show what each passage says. Follow the link to read it in the filing.
- Where it comes from
- Banks' annual reports (10-K), quarterly reports (10-Q) and earnings materials (8-K) filed with the SEC. How we did this
Annual report, report year 2025 filed 27 Feb 2026
Our use of artificial intelligence and automated technologies may expose us to operational, compliance and governance risks.
Sees AI as a riskDetail: GeneralProcess automationNew this year
We currently use, and may in the future evaluate or implement, artificial intelligence (“AI”), automation, and similar technologies to support certain internal processes or business functions. The use of these technologies involves inherent risks, including the risk of errors, model limitations, data quality issues, system failures, or unintended outcomes. If AI-enabled tools do not operate as intended or are not properly governed, our operations, risk management processes, or compliance with applicable laws and regulations could be adversely affected.
Using AI nowDetail: Names an areaProcess automationOperationsNew this year
The regulatory and supervisory framework applicable to AI continues to evolve and may limit our ability to deploy or expand AI-enabled tools.
Sees AI as a riskDetail: GeneralNew this year
Banking regulators have emphasized that the use of AI and automated decision-making technologies remains subject to existing legal and regulatory requirements, including those related to consumer protection, fair lending, data privacy, and model risk management. Regulatory expectations with respect to governance, transparency, documentation, and oversight of AI models are continuing to develop. As a result, we may be required to modify, delay, or limit our use of AI technologies, or incur additional compliance, governance, or operational costs.
Sees AI as a riskDetail: GeneralNew this year
AI models may produce outcomes that are difficult to explain, validate or monitor.
Sees AI as a riskDetail: GeneralMachine learningNew this year
Certain AI techniques may rely on complex or opaque algorithms that can make it challenging to fully explain model outputs or identify the underlying drivers of specific results. Limitations in explainability or validation may increase model risk and complicate compliance with supervisory expectations, including those related to model risk management, internal controls, and auditability. Failure to appropriately manage these risks could result in restrictions or other actions by regulatory agencies on the use of such technologies.
Sees AI as a riskDetail: GeneralMachine learningNew this year
Our use of third-party vendors for technology solutions, including those incorporating AI, may increase operational and data risks.
Sees AI as a riskDetail: GeneralNew this year
We rely on third-party service providers for certain technology platforms and services, some of which may incorporate AI or automated functionality. Our ability to manage the risks associated with these technologies depends, in part, on the controls and practices of such vendors. Deficiencies in vendor risk management, data security, or regulatory compliance could disrupt our operations, compromise sensitive information, or result in regulatory or contractual exposure.
Sees AI as a riskDetail: GeneralProcess automationNew this year
Increased public and regulatory scrutiny of AI could give rise to reputational risk.
Sees AI as a riskDetail: GeneralNew this year
The use of AI in financial services has been subject to heightened public and regulatory attention. Concerns regarding transparency, fairness, privacy, or data use, whether or not well founded, could adversely affect customer confidence or result in increased regulatory scrutiny. Any perceived misuse or failure of AI-enabled tools could harm our reputation and negatively affect our customer relationships.
Sees AI as a riskDetail: GeneralNew this year
In recent years, the size, structure, priorities, and operations of the federal government have continued to evolve. Federal actions have included changes to agency priorities, budgetary constraints, modifications to federal programs, workforce adjustments, and an increased emphasis on efficiency initiatives and the use of advanced technologies, including AI, across both the public and private sectors. These developments, whether implemented through legislation, regulation, executive action, or administrative practice, may have economic effects that are difficult to predict.
Sees AI as a riskDetail: GeneralNew this year
organizations, all of which are heightened as a result of advances in AI. Our systems and our third-party service providers’ systems have been, and will likely continue to be, subject to advanced computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing, social engineering, hacking and other cyberattacks.
Sees AI as a riskDetail: GeneralNew this year
Earnings release, Q4 2025 filed 29 Jan 2026
“We are making steady progress in deploying artificial intelligence across the organization, with several use cases already implemented to improve efficiency, risk management, and the customer experience, and a roadmap focused on responsibly scaling these capabilities. In parallel, we are evaluating opportunities in digital assets and digital deposit solutions, where we believe our platform and regulatory framework position us well for future innovation and growth,” stated CCBX President Brian Hamilton.
Using AI nowDetail: Names an areaOperationsRisk managementCustomer serviceNew this periodNew since the annual report
Annual report, report year 2024 filed 17 Mar 2025
The new administration has begun to implement significant changes to the size and scope of the federal government to achieve stated goals including reducing the federal budget deficit and national debt, improving the efficiency of government operations, and promoting innovation and economic growth. To date, these efforts have been carried out through a mix of executive actions aimed at eliminating or modifying federal agency and federal program funding, reducing the size of the federal workforce, reducing or altering the scope of activities conducted by, and possibly eliminating, various federal agencies and bureaus, and encouraging the use of artificial intelligence and other advanced technologies within the public and private sectors. If implemented, these changes may have varied effects on the economy that are difficult to predict. For instance, the delivery of government services and the distribution of federal program funds and benefits may be disrupted or, in some cases, eliminated as a result of funding cuts or recasting of federal agency mandates. Further, a substantial reduction of the federal workforce could adversely affect regional and local economies, both directly and indirectly, in geographies with significant concentrations of federal employees and contractors. It is possible that the velocity of such comprehensive changes to the federal government may be materially adverse to the market area where we conduct business and to our customers, which, in turn, could be materially adverse to our business, financial condition and results of operations.
Sees AI as a riskDetail: GeneralNew this year
7 passages in legal noticesThe forward-looking statements notice at the start or end of a filing. It often lists AI among many risks. It is never counted., not counted
10 2026 Technology Priorities Remain On Track With Sharpened Focus on Partner Experience • Digital payment rails: Continued build-out of digital payment rails and asset infrastructure, extending our reach into fast-growing payment ecosystems to sustain fee-based revenue growth, deposit growth and competitive differentiation through year-end and asset infrastructure • AI and automation: Expanded application of AI and automation across underwriting, compliance, and operations, designed to reduce cost-to-serve while advancing speed, scalability and consistency at the enterprise level • Enterprise data platform modernization: Ongoing modernization of our enterprise data platform, deepening analytics, regulatory reporting and AI enablement capabilities to help strengthen risk management and decision- making • Core technology, platform and integrated payment investments: Sustained investment in core technology, platform, and integrated payment capabilities, accelerating product development and resiliency while keeping a customer-first mindset at the center of every tool and experience we build • Partner experience: Deepened commitment to the partner experience, investing in the tools, support, and infrastructure that make it easier for partners to build, launch and scale on our platform Advancing Technology Enabled Growth Note: Data as of the three months ended June 30, 2026, unless otherwise indicated.
New this periodNew since the annual report
6 2026 Technology Priorities • Digital payment rails and asset infrastructure designed to expand access to fast-growing payment ecosystems, drive fee-based revenue growth, support deposit growth, and strengthen competitive positioning • AI and automation designed to streamline underwriting, compliance, and operations, reducing cost-to-serve while improving speed, scalability, and consistency • Enterprise data platform modernization designed to strengthen analytics, regulatory reporting, and AI enablement, enhancing risk management and decision-making • Core technology, platform and integrated payment investments designed to accelerate product development, improve resiliency, and apply a customer-first mindset in building digital tools and experiences that better serve both our partners and the end customer Advancing Technology Enabled Growth Note: Data as of the three months ended March 31, 2026, unless otherwise indicated.
New this periodNew since the annual report
5 ADVANCING TECHNOLOGY-ENABLED GROWTH Note: Data as of the three months ended December 31, 2025 unless otherwise indicated Implemented multiple artificial intelligence use cases to enhance operational efficiency, risk management, and customer experience ______________________________ Established a defined AI roadmap focused on responsibly scaling capabilities across platforms and processes ______________________________ Evaluating opportunities in digital assets and digital deposit solutions as part of longer- term innovation and growth initiatives ______________________________ Leveraging existing platform capabilities and regulatory framework to support future product development
New this periodNew since the annual report
13 COASTAL WORLD Coastal World is an immersive 3D web platform that promotes, educates, and informs visitors about digital banking solutions that best fit their lifestyle, values, or specific financial situations through a fun and engaging online experience. Opportunity and Potential 2023 Key Milestones • Added a fourth island with new fintech partners • Over 241,000 visits to the site • Over 1.5 million interactions tracked on the site • Average of 4 minutes on site per visit (industry average is 54 seconds) • 5,284 clicks to partner websites (Aug - Dec 2023) of ads • Visitor statistics: ◦ Age: 39% - 25-34; 22% 35-44; 13% 18-24 ◦ 53% male and 47% female www.coastalworld.com Engagement • The next generation of banking customers are comfortable with engaging online with 4.8 billion world wide social media users. • They are willing to spend their time and money online. Conversion As the “Digital Evolver” visits the experience, we will gather valuable demographic information to inform targeted marketing and create custom conversion funnels to acquire new partner customers. What is Next? • Implement feature set roadmap with enhancements to drive new customer acquisition • Utilize visitor demographic data to inform targeted fintech marketing initiatives • Explore the viability of tools such as AI, the Coastal Data Lake, Chat GPT, and third-party APIs • Collaborate with our Fintech partners on enhancements, new content, and custom campaigns
Same as last periodNew since the annual report
11 COASTAL WORLD Coastal World is an immersive 3D web platform that promotes, educates, and informs visitors about digital banking solutions that best fit their lifestyle, values, or specific financial situations through a fun and engaging online experience. Opportunity and Potential 2023 Key Milestones • Added a 4th island with new fintech partners • Over 241,000 visits to the site • Over 1.5 million interactions tracked on the site • Average of 4 minutes on site per visit (industry average is 54 seconds) • 5,284 clicks to partner websites (Aug - Dec 2023)s of ads • Visitor statistics: ◦ Age: 39% - 25-34; 22% 35-44; 13% 18-24 ◦ 53% male and 47% female. www.coastalworld.com Engagement • The next generation of banking customers are comfortable with engaging online with 4.8 billion world wide social media users. • They are willing to spend their time and money online. Conversion As the “Digital Evolver” visits the experience, we will gather valuable demographic information to inform targeted marketing and create custom conversion funnels to acquire new partner customers. What is Next? • Implement feature set roadmap with enhancements to drive new customer acquisition • Utilize visitor demographic data to inform targeted fintech marketing initiatives • Explore the viability of tools such as AI, the Coastal Data Lake, Chat GPT, and third-party APIs • Collaborate with our Fintech partners on enhancements, new content, and custom campaigns
New since the annual report
9 COASTAL WORLD Coastal World is an immersive 3D web platform that promotes, educates, and informs visitors about digital banking solutions that best fit their lifestyle, values, or specific financial situations through a fun and engaging online experience. Opportunity and Potential Key Milestones • Nominated for 3 international Website of the Year Awards in 2022 ◦ Received CSS Website of the Year • Over 100,000 visits during first 2 months of digital advertising • 960,000 interactions tracked for all partners during August & September • 325,000 views of partner content during first two months of ads • Visitor statistics: ◦ Age: 41% of 18-24, 20% 35-43, and 19% 35-44 ◦ 58% male and 42% female. www.coastalworld.com Engagement • The next generation of banking customers are comfortable with engaging online with 4.8 billion world wide social media users. • They are willing to spend their time and money online. Conversion As the “Digital Evolver” visits the experience, we will gather valuable demographic information to inform targeted marketing and create custom conversion funnels to acquire new partner customers. What is Next? • Implement feature set roadmap with enhancements to drive new customer acquisition • Utilize visitor demographic data to inform targeted fintech marketing initiatives • Explore the viability of tools such as AI, the Coastal Data Lake, Chat GPT, and third-party APIs • Collaborate with our Fintech partners on enhancements, new content, and custom campaigns
New this periodNew since the annual report
9 COASTAL WORLD Coastal World is an immersive 3D web platform that promotes, educates, and informs visitors about digital banking solutions that best fit their lifestyle, values, or specific financial situations through a fun and engaging online experience. Official launch announced on June 20, 2023. Opportunity and Potential Soft Launch Accolades • Nominated for 3 international Website of the Year Awards ◦ Received CSS Website of the Year • 89,000+ visits, averaging over 8 minutes on site per visit • 3,322 fintech partner referrals • $0 spent on advertising or promotion of the site • Visitor statistics: ◦ Age: 41% of 18-24, 20% 35-43, and 19% 35-44 ◦ 58% male and 42% female. www.coastalworld.com Gamification • In 2021, the US spent $60.4 billion on games. • Spending increased 14% compared to the year before. • Forecasts for the near future show that the gaming industry worth might reach $200 billion by 2024. Engagement • The next generation of banking customers are comfortable with engaging online with 4.8 billion world wide social media users. • They are willing to spend their time and money online. Conversion As the “Digital Evolver” visits the experience, we will gather valuable demographic information to inform targeted marketing and create custom conversion funnels to acquire new partner customers. What is Next? • Launch paid media plan and drive traffic to the website • Develop feature set roadmap with enhancements to drive new customer acquisition • Utilize visitor demographic data to inform targeted fintech marketing initiatives • Explore the viability of tools such as AI, the Coastal Data Lake, Chat GPT, and third-party APIs. • Collaborate with our Fintech partners on enhancements, new content, and custom campaigns
New this periodNew since the annual report