In a digital age, smaller financial institutions must offer… lollipops?

Recent bank failures have cast an unfair light on smaller financial institutions. The shuttering of Silicon Valley Bank, Silvergate Bank, and Signature Bank in March 2023 left many account holders across the nation toiling over one burning question: “How safe is my money?” In the days following the collapse, the top 25 banks in the nation saw an influx of deposits to the tune of $125 billion while the rest bid farewell to a collective $108 billion over the same time period.

What motivates people to bank the way they do and where they do? It’s not simply that some banks are too big to fail, although financial stability (and the likelihood of a bailout) does play a big role in the success or failure of today’s financial institutions. There are other factors that keep smaller banks thriving despite public scrutiny, but they must be tempered with a growing need for modernity. In this blog post, we’ll explore some of these factors, discuss ways small banks can make a bigger impact today, and find out what lollipops have to do with any of it.

A generational view of trust and lollipops

Balance sheets have become nimbler in an age where money moves at the tap of a button. That can be challenging for banks wanting to hang onto deposits long term. With younger generations flooding the workforce and making their own financial decisions, there doesn’t seem to be much loyalty to a specific bank or branch. There’s only trust in the process that their money can be securely—and digitally—transferred from bank to bank.


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