Pennsylvania Bank Issues Urgent Alert After AI Application Triggers Data Breach, Exposing Sensitive Customer Info

A Pennsylvania-based bank is disclosing a data breach that was caused by artificial intelligence (AI) software.

According to a filing with the U.S. Securities and Exchange Commission (SEC), Community Bank experienced a data breach earlier this month that impacted “customer names, social security numbers and dates of birth.”

The filing says the data breach was caused internally after an “unauthorized artificial intelligence-based software application” was used at the bank to handle confidential customer information.

“Upon discovery, the Bank promptly took steps to secure the information at issue and initiated an internal investigation with the assistance of external cybersecurity advisors. The investigation into the incident, including the scope and root cause, remains ongoing.”

On the impact of the data breach on the financial institution, Community Bank says,

“The incident did not involve a disruption to the Bank’s operations, customer access to accounts or services, payment systems, or core information technology infrastructure; however, due to the volume and sensitive nature of the non-public information at issue, on May 7, 2026, the Company determined the event to be material.”

The SEC filing comes amid a report by telecommunications giant Verizon saying that the use of unauthorized AI applications on corporate devices is rising rapidly and increasing cybersecurity risks in many workplaces.

“Shadow AI, referring to employees using unapproved AI tools at work, is now the third most common non-malicious data leakage related activity. Frequent usage of AI tools by employees has surged from 15% to 45% of employees in a single year, highlighting an elevated risk of data exfiltration associated with unapproved platforms.”

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