As a financial inclusion and education officer at $3.3 billion Premier America Credit Union, headquartered in Chatsworth, California, 32 year-old Alfredo Martinez spends a lot of time talking to fellow young adults about the advantages of banking with a community-based financial institution. But oftentimes, he finds they’ve already opted for online neobanks like Chime, or mobile wallet and payment services such as Cash App or Apple Pay.
“I don’t think youth generally know the entire financial landscape, so they just default to what’s relevant and what their friends are using,” Martinez says. “I think why the success is so [significant] with some of these neobanks is that their digital online account opening process is borderline seamless.”
His experience may be anecdotal, but it is reflective of a major trend in banking. A recent report from J.D. Power shows Chime, a fintech company that provides FDIC-insured digital banking services through partnerships with sponsor banks, claimed the highest percentage of new checking accounts opened in the fourth quarter of 2025. Chime and other fintechs were also the top beneficiaries of the phenomenon known as soft switching, where customers open up a secondary account and quietly begin to use it as their primary account. In both categories of soft switching and new account openings, Chime beat out giants like J.P. Morgan Chase & Co. and Bank of America Corp.
But it isn’t just Chime making these inroads, and it isn’t just happening in one or two quarters. A study from the global consulting firm Simon Kucher shows 28% of Americans now consider a neobank their primary financial institution, including one-third of adults in their 30s.That isn’t an accident. Neobanks aggressively market themselves to young consumers. Chime alone spent $635 million on sales and marketing in 2025.
Joe Sullivan, CEO of Market Insights, a firm that provides data-driven insights to community banks and credit unions, says neobanks have also simply produced a better digital experience for young consumers. “They took the pain points in the typical financial ecosystem and they solved it,” Sullivan says. “Why are they able to attract these younger generations? Speed, simplicity, security, ease of doing business with them.”
While the data is already concerning for community-based financial institutions, the future looks even more daunting. Baby boomers already hold more than half the nation’s wealth, according to the Federal Reserve, and data from Cerulli Associates shows older generations are projected to pass down more than $80 trillion to younger generations by 2048 — in what is being called the great wealth transfer. It has left many financial institutions asking how they can compete to keep those funds.
Providing a Better Digital Experience
Both bankers and credit union professionals are well aware of the challenges that lie ahead. Kathy Kraninger, CEO of the Florida Bankers Association, says her member banks have to remain nimble to balance engaging new retail banking customers with their commercial-focused approach.
“Their core customer base is small business owners,” she says. “And if you are looking at college kids, they have different needs than somebody who’s got a really robust portfolio of businesses they own and businesses they’re involved in. And so, the types of financial products they need are different, but banks absolutely want to grow with their customers.”
That growth lies in part, Kraninger says, in boosting innovation. “And we’re going to be doing that actually with our annual meeting this year,” she says. “A big part of our theme is embracing that innovation and change, understanding what it means for our customers and communities, and where community banks can continue to thrive and carve out that niche for themselves.”
But appealing to the younger generations does not seem to be a major focus for most bankers. Just 3% of the bank CEOs, technology executives and board members who responded to Bank Director’s 2025 Technology Survey identified remaining relevant to younger generations as the primary objective guiding their bank’s technology strategy. (The No. 1 response was improving efficiency, at 65%. Attracting and retaining customers was No. 2, at 25%.)
Martinez says Premier America Credit Union is in the process of pushing out a new digital platform with streamlined interfaces and more options for its members, but not all credit unions can afford to do so. “A lot of credit unions are having a tough time,” he says. “This is why you’re seeing a lot more mergers and acquisitions, [and] less credit unions.”
Solutions for Securing Future Assets
Banks and credit unions can show their value to younger generations and keep some of those inherited assets. But currently, it isn’t always an easy process, says Guy Stovall, CEO of NewFirst National Bank, a subsidiary of $944 million NewFirst Financial Group, headquartered in El Campo, Texas. “We’ll spend two years [sometimes] helping the kids get everything all resolved,” he says. “So, we do the dirty work, but at the end of the day, they’ve got a relationship four states away with another banker.”
But there are innovators offering solutions to that problem. Sisters Martha Underwood and Shella Sylla are the cofounders of Prismm, a fintech company that has developed what they call an “estate orchestration infrastructure for banks and credit unions.” Prismm’s solution allows financial institutions to store all of an existing customer’s financial and retirement account information, along with pertinent documents like wills, trusts, life insurance policies, property deeds and business agreements, all in one secure online platform.
Sylla says it is a game changer for the beneficiary. “Prior to this, things were scattered, things were held by different people. You might have a financial adviser that has one piece of the information, you might have an estate attorney that has another piece of the information,” she says. “What Prismm does, it kind of gives you a holistic view because it bridges all of that and puts everything in one central location, and then you control who has access to that information from a beneficiary standpoint.”
Renasant Bank, a subsidiary of $26 billion Renasant Corporation, based in Tupelo, Miss., is in the process of adding Prismm for its customers in five southeastern states, according to Underwood. She says the platform will allow the bank to build relationships with beneficiaries, which should not only help keep more deposits, but help their wealth management team secure more assets as well. “That is where the banks can really leverage their trust, their expertise, the guardrails, the governance, the security that they provide to the communities at large on how to be good stewards of your dollars,” Underwood says.
Nearly a dozen community banks are already using Paige, another digital estate planning platform that allows customers to create a will, as well as store documents, account passwords, pins and codes. It even allows a customer to store photos, videos and other memories that can be crafted into messages that can be shared with loved ones even after the person has passed.
Sullivan believes it is imperative that community financial institutions embrace these types of digital tools, because they allow them to do what they do best — build relationships. But he says the clock is ticking. “I just think it is urgent,” Sullivan says. “We’ve got to prompt our clients to move toward action. Defining the problem is one thing. We know what the problem is. Now it comes to the solution here in terms of the next generation outreach and so forth.”
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