The deposit displacement numbers are staggering—and deeply concerning for banks and credit unions. According to research from Cornerstone Advisors and Investifi, more than $3 trillion has slipped out of banks’ and credit unions’ coffers and into the hands of fintechs, neobanks, and digital investment platforms over the past few years. This isn’t just a passing trend—it’s a full-scale displacement of deposits that threatens the foundation of community financial institutions. And at the center of this disruption lies an unexpected culprit: consumer investing. At the center of the situation is the changing role of the checking account. At the center of the investing-led deposit displacement is Robinhood who has amassed more than $18 billion in deposits—despite the company’s fines and business model. The deposit displacement crisis isn’t irreversible. Cornerstone estimates that banks and credit unions can realistically reclaim about a third of the nearly $2 trillion in funds lost to fintech investing platforms. The key? Developing integrated investing services that:
- Allow consumers to invest directly from their checking account.
- Offer bundled financial wellness features like credit score monitoring and subscription management.
- Provide seamless, mobile-first investment experiences within existing digital banking platforms.
- Deliver targeted education to demystify investing, especially for young consumers who believe they don’t have enough money to get started.
- In fact, 70% of non-investing Gen Zers and Millennials report having more than $5,000 in savings—plenty to open an investment account. The problem isn’t capability—it’s awareness and access. Community banks and credit unions can’t simply “market harder” or “be cool like Robinhood” to win back lost deposits. They must:
- Reimagine their checking and savings products to integrate investing; Partner with fintechs or investtech providers to embed seamless investment options; Equip consumers with tools and education to overcome investing barriers; Expand digital capabilities to meet the expectations set by neobanks and crypto platforms. The $2 trillion deposit outflow isn’t just a threat—it’s a wake-up call. Banks and credit unions have a limited window to evolve their product offerings, digital experiences, and customer education strategies to stem the tide.