Community banks and credit unions who thought deposit outflows would slow with the “death of crypto” are facing a rude surprise. Crypto hasn’t died—it’s become part of the competition. And the bigger threat today isn’t just crypto exchanges, but fintech investing platforms that bundle high-yield deposits with modern wealth services.
During the crypto boom of 2021–22, community bankers watched billions flow from their institutions into exchanges like Coinbase. A Fiserv review of 188 community institutions at the time showed over $15 million leaving in just 60 days via ACH transfers into crypto wallets. Robinhood alone attracted more outflows than Amazon and Walmart combined.
Some bankers hoped that when crypto prices collapsed, so would the threat. Instead, fintechs doubled down. Today, crypto sits alongside stocks, ETFs, and high-yield accounts inside a single mobile app. It’s no longer just speculation—it’s part of a larger fight for deposits and digital engagement.
The battle has shifted squarely onto community banks’ home turf: savings and checking accounts.
What started as debit cards and trading apps has morphed into direct competition for deposits.
For most consumers, the appeal is simple:
Younger consumers are especially vocal. Surveys show 72% of Gen Z and 66% of Millennials say they want digital investing tools embedded in their primary bank account. For them, a “checking account plus savings” relationship isn’t enough—they want banking and wealth-building in the same place.
The “crypto years” proved how quickly deposits can leave when consumers are offered products they actually want. Now, with interest rates back in focus, that migration is accelerating.
These examples prove two things: consumers are consolidating financial lives around digital-first platforms, and smaller banks are capable of stepping into that conversation if they move quickly.
Community banks and credit unions have always competed on relationships, trust, and service. But they’ve lagged in digital tools, often relying on core providers like Jack Henry, Q2, Alkami, or Mahalo for online and mobile banking. Historically, this limited their ability to differentiate.
That is starting to change. Core and digital providers are investing heavily in integrations that let FIs add modern services without rebuilding everything from scratch. This opens the door for community institutions to embed Robinhood-style investing services directly into digital banking—a move once thought impossible.
And unlike fintechs, community FIs have one major advantage: they control the rates they pay on deposits. While fintechs spend heavily to buy loyalty, local banks and credit unions can decide how to structure competitive yields within their own models.
The tools are already in community bankers’ hands. To win, they must:
Those that move now can retain deposits, deepen engagement, and keep consumers from consolidating their financial lives with fintech brands that promise more. Those that don’t will see accelerating outflows and shrinking relevance.
The fight for deposits isn’t easing—it’s intensifying. Crypto didn’t die; it evolved into part of a broader competitive threat, bundled inside apps that now look and feel like full-service banks.
Looking ahead, the stakes are clear:
Those that embrace this moment can not only survive but win. Those that wait will find themselves watching from the sidelines as consumers take their deposits, and their loyalty, elsewhere.
The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.
