Deposit Displacement Killing Banks and Credit Unions, New Cornerstone Advisors Research Finds

Ron Shevlin

A new study from Cornerstone Advisors, a leading provider of business and technology consulting services for banks, credit unions, and fintech firms, estimates that more than $2 trillion has moved out of traditional financial institutions and into fintech investment and high-yield savings accounts in the past few years.

The research, Stemming the Deposit Outflow: The $2 Trillion Investing Opportunity for Banks and Credit Unions, doesn't just chart where the money is going; it reveals why. In short, the primary checking account is no longer enough. Consumers are unbundling their financial lives and assembling best-in-class solutions across institutions, and investing is one of the first things they take elsewhere.

The study, commissioned by InvestiFi, is based on a survey conducted by Cornerstone in May 2025 of 2,757 U.S. adults with a smartphone and a checking account. Key findings include:

• Of the $2.15 trillion in deposits lost specifically by community banks and credit unions, 65% came from Gen X and baby boomer customers
• Nearly half of zillennials (Gen Z and millennials combined) aren’t investing, mainly due to insufficient knowledge and a perceived lack of funds, both of which point to a need for better financial education
• Over 50% of zillennials said they’d switch to a bank that offered checking integrated with investing and other benefits

According to Ron Shevlin, chief research officer at Cornerstone Advisors and author of the report, the changing role of the checking account is at the heart of the shift. “Increasingly, Americans treat their checking accounts like paycheck motels—temporary places for their money to stay before it moves on to higher-yield savings accounts, investment platforms, and other alternative financial services.”

On average, Americans surveyed for the report rated their primary checking account a lukewarm 7.8 out of 10, with younger generations even less impressed. More than a third of Gen Zers and 40% of millennials said they’d be “very likely” to open a new checking account if they could directly make investments from it, get rewarded for moving money into an investment account with the same provider, or bundle the account with credit score management, subscription management, and bill negotiation.

“The data makes clear that consumers aren’t abandoning banking, they’re abandoning banking that doesn’t deliver measurable value," Shevlin concluded.
The rise of cryptocurrency is amplifying this threat. The study found that:

• 25% of Gen Z and 33% of millennial investors hold crypto assets
• On average, zillennial investors have 25% of their investable assets in cryptocurrencies—20% have more than half of their portfolio in crypto

• 33% of zillennials and roughly 20% of Gen Xers plan to invest in crypto this year

Banks and credit unions that dismiss crypto as a fringe fad risk are missing the broader investing shift that’s pulling deposits—and entire relationships—out of the traditional banking ecosystem, Shevlin observed.

What consumers are demanding is composable finance, said Kian Sarreshteh, CEO and co-founder of InvestiFi. They want digital tools that enable them to save, spend, invest, and grow all within one seamless experience, and fintechs are already delivering this.

“Community banks and credit unions aren’t just losing Gen Z,” Sarreshteh 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.”

To learn more, download the full report here: https://www.crnrstone.com/gritty-insights/research/stemming-the-deposit-outflow-the-2-trillion-investing-opportunity-for-banks-and-credit-unions

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