In the last five years, over $2 trillion in deposits have shifted from traditional financial institutions to fintech platforms, not just from younger consumers, but from anyone seeking greater value and control over their money. This data stems from a new report released by Cornerstone Advisors, a financial services research and consulting firm, and commissioned by InvestiFi, a provider of digital investing solutions for financial institutions.
The report, “Stemming the Deposit Outflow: The $2 Trillion Investing Opportunity,” doesn’t just indicate where the money is going, it reveals why. In short: the primary checking account is no longer enough. Consumers are unbundling their financial lives, assembling best-in-class solutions across institutions, and investing has become one of the first things they take elsewhere.
“Community banks and credit unions aren’t just losing Gen Z,” Kian Sarreshteh, CEO and co-founder of InvestiFi, said. “They’re losing anyone who’s actively trying to grow their money, and that means nearly everyone. Consumers have stopped waiting for their bank to evolve; they’re moving on.”
Key findings:
- Fintech investment accounts have drawn $2.15 trillion in deposits away from traditional financial institutions. Of the funds lost specifically by community banks and credit unions, 65% came from Gen X and Boomer customers.
- Nearly half of Zillennials aren’t investing — mainly due to a lack of knowledge and perceived insufficient funds, both of which point to a need for better financial education.
- Over 50% of Millennials and Gen Z say they’d switch to a bank that offered checking integrated with investing, rewards, credit score tools or bill negotiation.
“Consumers aren’t abandoning banking, they’re abandoning banking that doesn’t deliver measurable value,” Ron Shevlin, managing director and chief research officer at Cornerstone, said. “Checking accounts have become ‘paycheck motels — temporary places for people’s money to stay before it moves on to higher-performing destinations.”
What consumers are demanding, and fintechs are already delivering, is composable finance: digital tools that allow them to save, spend, invest and grow, all in one experience.
“This isn’t a retention problem. It’s a relevance crisis. Every institution still believes it’s the center of a customer’s financial life,” Shevlin said. “That era is over. You earn that role by helping customers take meaningful action, and right now, that means investing. Not as an afterthought or a referral, but as a native part of the checking experience.”
“This isn’t just about technology,” Sarreshteh said. “Offering investing is not the strategy. Using it to redefine the relationship with your customers, that’s the strategy. That’s how you stop being one of five apps on someone’s phone and start being the one they trust to grow with.”
The report estimates that up to one-third of lost deposits could be recaptured, but only by institutions willing to evolve. Those who continue to rely on rate-based promotions or legacy trust may find themselves further unbundled and, ultimately, irrelevant.
