A Market at a Crossroads

For years, the narrative has been that Big Brand Banks and fintech giants are steadily eating into the market share of smaller financial institutions. With their scale, budgets, and brand recognition, it seemed inevitable that regional and community banks would be left behind.

But that story isn’t finished. With more than 10,000 regional banks and credit unions across the U.S., how this next chapter unfolds will shape the financial futures of millions of people and small businesses.

The very weaknesses typically ascribed to smaller banks—limited technology resources and slower innovation—may actually be the key to their future strength.

Why Smaller Banks Have an Edge

Big banks face significant barriers to digital transformation: legacy technology stacks, sprawling bureaucracies, and siloed operations. Rolling out new services is costly and slow.

Regional and community banks, by contrast, often outsource their technology infrastructure to core providers like Alkami, FIS, Fiserv, Jack Henry Banno, Q2, and others. This model allows for a one-to-many approach: a single integration can enable innovative new services for many banks at once.

That means smaller banks can move faster, implement at lower cost, and leapfrog ahead of larger competitors.

Meeting Consumer Demand

Today’s customers aren’t choosing banks based on the closest branch.They’re choosing based on digital experiences and the breadth of financial services available at their fingertips.

Key shifts include:

• Investing is mainstream. Retail investors now account for over 30% of total trading volume, up threefold in just 10 years.
• Broader asset classes. Consumers are engaging not just in equities but also cryptocurrencies, precious metals, and even fractional ownership of alternative assets like art and farmland.
• Younger generations lead the way. Gen Z and Millennials expect their primary bank to support investing, saving, and spending in one place—and are more likely to switch providers if those services aren’t available.

This presents a clear opportunity: community banks that expand into digital wealth management can meet rising demand while strengthening relationships with younger, digitally engaged account holders.

Competitive Landscape: Where Others Are Winning

• Fintechs like Robinhood, Coinbase, and SoFi have attracted millions of younger customers with mobile-first investing experiences.
• Traditional investment firms such as Schwab and Fidelity have successfully expanded their retail platforms.
• ‍Big banks continue to capture deposits at scale: between 2010 and 2017, deposits at the largest banks grew by 82%, compared to 46% at smaller institutions. Today, the top 10 banks hold nearly half of all domestic deposits.

Smaller banks, meanwhile, have largely been excluded from this transformation—yet consumers say they would prefer to access digital wealth services through their existing bank.

The Turnkey Solution

The challenge is execution. Building a digital wealth platform from scratch is costly and time-consuming, requiring multiple vendors, integrations, and compliance hurdles.

A turnkey digital wealth management platform changes the equation.By delivering an all-in-one solution that includes:

• Active and passive investing in stocks and ETFs
• Commission-free trading
• Access to cryptocurrencies and precious metals
• Extensibility to future alternative assets

…community banks can compete head-on with big banks and fintechs, but without the overhead or complexity.

Case in Point: Banks That Have Already Moved

Some forward-looking banks are already experimenting. For example, Quontic Bank attracted national attention with its Bitcoin Rewards Checking account. While isolated, it proved that community banks can innovate and win headlines when they offer compelling digital products.

The difference now is that with turnkey solutions available, innovation no longer has to be a one-off. Any regional or community bank can quickly expand its product scope and deliver wealth management tools to customers directly inside their digital banking experience.

Looking Ahead: Two Possible Futures

If smaller banks don’t act: Big banks and fintechs will continue to consolidate deposits and relationships, leaving community banks sidelined. Rising customer expectations will make it harder and harder to win back market share.

If they do act: Regional and community banks can combine their historic strengths—personal service and community trust—with modern digital wealth management to offer customers something no one else can: value, convenience, and relationships under one roof.

FAQ: Digital Wealth Management forCommunity Banks

• What is a turnkey digital wealth management platform?
  A ready-made solution that integrates seamlessly into a bank’s core and digital channels, enabling customers to invest across multiple asset classes.
• Why is this important now?
  Younger, digitally savvy consumers expect more than checking and savings. They want investing and wealth management from their primary bank.
• How can smaller banks compete with larger ones?
  By leveraging their outsourced core providers, they can adopt new solutions faster and at lower cost than big banks tied to legacy systems.
• What assets can customers access?
  Today’s leading turnkey platforms offer stocks, ETFs, crypto, and precious metals, with flexibility to expand into new alternative assets over time.

Final Word

Regional and community banks don’t need to play catch-up—they can leap ahead. By embracing turnkey digital wealth management, they can meet rising consumer demand, attract younger generations, and compete directly with the biggest names in banking.

The opportunity is here. The question is who will seize it first.