How Wealth Tech is Unlocking New Revenue Streams and Increasing Deposits for Credit Unions, Banks, and Financial Institutions

Febuary 27, 2025

By: Ben Malena

The financial services industry is at a crossroads. Credit unions, banks, and other financial institutions (FIs) face mounting pressure from digital-first fintech startups, shifting consumer expectations, and economic uncertainty. Traditional models of banking revenue—loan interest, credit card fees, and account service charges—are no longer enough to sustain long-term growth.

Enter wealth technology (wealth tech), a rapidly evolving sector that integrates digital investment solutions, automation, and artificial intelligence into financial services. By embedding wealth tech solutions, credit unions, banks, and FIs can diversify revenue streams, attract new deposits, and retain members and customers in an increasingly competitive landscape.

The Wealth Tech Opportunity for Financial Institutions

Wealth tech is transforming the way consumers invest, save, and manage their finances. From AI robo-advisors to fractional investing and embedded investment platforms, wealth tech democratizes wealth-building tools, making them more accessible than ever. For financial institutions, integrating these solutions can drive significant business benefits:

• Increased Deposit Growth: Wealth tech solutions encourage customers to keep more funds within their financial institution, improving overall deposit growth.
• New Revenue Streams: Investment advisory fees, subscription models, and transaction-based revenue provide additional income opportunities.
• Enhanced Customer Retention: Offering comprehensive financial services, including investing, strengthens customer relationships and loyalty.
• Market Differentiation: Credit unions and banks that adopt wealth tech gain a competitive edge over those that rely solely on traditional banking products.

The Data Speaks: Why Wealth Tech Matters

The numbers illustrate the growing demand for digital wealth solutions:

• The global wealth tech market is projected to grow at a CAGR of 13.5% from 2023 to 2030, reaching a value of $11.9 billion by 2030. (Source: Grand View Research)
• Robo-advisory services are expected to manage over $6 trillion in assets by 2027, up from $1.4 trillion in 2023. (Source: Statista)
• Younger investors prefer digital wealth management solutions, with 80% of millennials and Gen Z investors favoring digital platforms over traditional advisors. (Source: CFA Institute)
• Embedded finance adoption is increasing, with 88% of financial institutions planning to embed fintech solutions into their offerings within the next five years. (Source: Accenture)

How Wealth Tech Increases Deposits

Wealth tech platforms create a seamless integration between saving and investing, which encourages customers to retain more assets within a single financial ecosystem. Here’s how it happens:

1. Automated Investing Drives Savings and Retention

Wealth tech solutions like automated investment portfolios allow credit union members and banking customers to invest spare change, set up recurring deposits, and build long-term wealth. This keeps their money within the institution, boosting total assets under management (AUM) and increasing deposits.

2. Embedded Investment Platforms Keep Customers Engaged

Instead of transferring funds to third-party investment apps, customers can invest directly from their banking app, eliminating the need to move money elsewhere. By embedding wealth tech, FIs keep customer funds within their institution, reducing outflows and increasing overall deposits.

3. Higher Yield Incentives for Depositors

By integrating wealth tech, banks and credit unions can offer hybrid savings-investment accounts with higher yield incentives. For example, a portion of a depositor’s balance could be automatically allocated into low-risk investments, offering better returns than a traditional savings account.

4. Retirement and Long-Term Investing Solutions

With 56% of Americans worried about not having enough savings for retirement (Source: Bankrate), financial institutions that offer easy access to IRAs, 401(k) rollovers, and personalized investment strategies through wealth tech will attract higher deposits and long-term commitments from customers.

Expanding Revenue Streams Through Wealth Tech

Wealth tech not only increases deposits but also opens up multiple revenue opportunities for financial institutions:

1. Advisory and Management Fees

Credit unions and banks can introduce fee-based advisory services through digital wealth management, charging a small percentage on assets under management (AUM). Even a modest 0.25% fee on a $100 million AUM would generate $250,000 in annual revenue.

2. Subscription-Based Investment Services

Some institutions offer premium investment tools and educational content through a subscription model. A $10 monthly subscription fee with just 10,000 subscribers equates to $1.2 million in annual revenue.

3. Revenue from Trading and Transactions

Embedded trading platforms allow FIs to earn revenue from stock, ETF, and crypto transactions through small per-trade fees or spreads.

4. Partnerships and White-Label Solutions

Financial institutions can integrate third-party wealth tech solutions under their brand (white-labeling) and earn revenue-sharing fees from wealth management services.

The Path Forward: Implementing Wealth Tech in Financial Institutions

To successfully integrate wealth tech and unlock these revenue opportunities, financial institutions should:

1. Identify the Right Wealth Tech Partner: Collaborate with fintech providers specializing in embedded investment solutions tailored to FIs.
2. Ensure Seamless Integration: Embed wealth tech into existing digital banking platforms for a frictionless user experience.
3. Educate Customers: Offer financial literacy programs to encourage adoption and maximize the impact of wealth tech services.
4. Leverage AI and Automation: Use AI-driven financial planning tools to personalize investment recommendations and optimize engagement.
5. Regulatory Compliance: Work with legal teams to ensure all investment services comply with SEC, FINRA, and other regulatory requirements.

Conclusion

Wealth tech is no longer a “nice-to-have” but a strategic necessity for financial institutions looking to thrive in the digital age. By embedding investment solutions, banks, credit unions, and FIs can increase deposits, create new revenue streams, and provide customers with the tools they need to build wealth.

The institutions that move quickly to adopt wealth tech will not only stay competitive but also unlock long-term financial growth for both their customers and their own balance sheets. Now is the time to embrace the wealth tech revolution.

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