Online-Only Bank Adoption Is Rising. Older Consumers Are Catching Up: What Credit Unions Should Do Next

Summary:

• Online-only bank membership is growing across age groups, with the biggest acceleration coming from consumers 45 or older.
• Consumers under 45 still lead adoption (online-only bank membership rose from 61% in 2022 to 66% in 2025), meaning “digital-first” remains the default expectation.
• Surprising insight: Online-only bank membership among consumers 45+ jumped from 24% (2022) to 35% (2025). That’s now “over 1 in 3” older consumers indicating online-only bank membership.
• The competitive threat isn’t only “new fintechs winning Gen Z.” It’s digital competitors successfully penetrating traditionally loyal, deposit-rich segments, which raises the stakes for retention and relationship strategy.
• Credit unions should treat digital adoption as a retention and share-of-wallet problem, not just a marketing awareness problem. Backed by better segmentation, onboarding, security messaging, and measurable conversion/engagement KPIs.

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What this data shows: Online-Only Bank Membership (2022 vs 2025)

While consumers under 45 remain primary adopters, online-only bank membership has “significantly risen since 2022 among those 45 or older, as now over 1 in 3 are indicating membership.”

The findings show online-only bank membership by age cohort:

• Under 45
• 2022: 61%
• 2025: 66%
• 45 or older
• 2022: 24%
• 2025: 35%

The Outlook: digital competitors are successfully penetrating traditionally loyal member bases, creating a need for retention strategies focused on relationship value and account security to protect deposit-rich segments from migrating to fintechs.

Why It Matters for Credit Unions:

If you lead marketing, retail, lending, or member experience at a credit union, this finding is less about “online banks” and more about how quickly consumer banking behavior is normalizing around digital alternatives. Including among older, historically loyal segments.

This is a deposits-and-retention story first

Credit unions don’t lose relationships overnight; they lose them in layers:

1. A fintech becomes the “everyday app,”
2. Direct deposit (or paycheck flows) moves,
3. Bill pay and recurring payments follow,
4. Lending becomes a rate-driven comparison shop,
5. The credit union becomes “secondary.”

Even without additional product-level breakdown, the implication is clear: online-only adoption among 45+ increases the likelihood of relationship fragmentation, which makes retention and primary financial institution (PFI) strategy more urgent.

It also changes the ROI of acquisition…

When online-only banks expand beyond younger demographics, they’re no longer just competing in the “new-to-credit” funnel. They’re competing in higher-value, established households. That means credit unions face:

• Higher cost of acquisition (more competition in paid search/social and more rate/offer-driven switching behavior)
• Higher cost of inaction (losing deposits often undermines lending growth capacity and net interest margin strategy)
• More pressure on experience (frictionless onboarding, self-service, and real-time support are now expected by more of the market)

Contrarian take: “Older consumers are loyal” is becoming a risky assumption

A common misconception is that older members are digitally resistant and therefore “safe.” The data challenges that narrative. When 35% of consumers 45+ indicate online-only bank membership, loyalty is no longer a demographic guarantee; it’s something the credit union must earn and defend with experience, trust, and relevance.

What’s Driving This Trend

Evidence: Online-only bank membership increased between 2022 and 2025 in both age cohorts, with a larger lift among 45+ (24% to 35%) than under 45 (61% to 66%). The findings also assert digital competitors are penetrating traditionally loyal bases, requiring retention strategies that focus on relationship value and account security.

Possible drivers:

1) Digital comfort has expanded, not plateaued

Digital comfort is moving from preference to default behavior, even among older consumers. This is evidenced by both rising online-only bank membership and declining branch-first loan application preference.

For consumers 45 or older, preference for applying for a loan in-person at a branch fell from 52% (2022) to 47% (2025) (Report p. 32). And while under-45 consumers remain the most digital-forward, the shift is still directional: mobile is now a leading channel for key financial actions, with “on a mobile app” loan preference rising to 33% among under-45 consumers (Report p. 32).

2) Convenience is winning “habit loops”

Convenience is becoming the deciding layer: consumers increasingly value mobile app capabilities and virtual banking, and mobile is now a leading channel preference for key actions like loan applications.

Among consumers under 45, “mobile app capabilities” increased as a valued factor from 28% (2022) to 31% (2025), and “the ability to do all banking virtually” rose from 17% to 19% (Report p. 18).

Across total respondents, “mobile app capabilities” rose from 21% to 26% and “the ability to do all banking virtually” rose from 16% to 17% (Report p. 19).

This preference shift shows up in behavior too: mobile app loan applications are now the top preference for under-45 consumers at 33%, overtaking branch visits (Report p. 32).

3) Security and trust are now competitive battlegrounds

Security issues are one of the top barriers to choosing a FI among under-45 non-CU consumers (55% in 2022; 57% in 2025) (Report p. 40).

Just as importantly, digital trust is being judged through experience: “poor mobile app experience” as a preventing factor jumped from 33% (2022) to 45% (2025) among under-45 non-CU consumers (Report p. 40).

And consumers are also signaling appetite for visible fraud-prevention utility: 34% of under-45 consumers want their institution to “use AI to detect and prevent fraud” (vs. 31% of consumers 45+) (Report p. 12).

4) Fintech adoption is no longer age-coded

Fintech adoption isn’t confined to ‘young switchers.’ Online-only bank membership is rising even among older consumers and among members who still call a credit union their primary FI Meaning, primary status doesn’t guarantee exclusivity.

Among credit union members who consider their CU their primary financial institution (PFI), online-only bank membership rose meaningfully:

• under 45: 54% (2022) to 62% (2025);

• 45 or older: 20% (2022) to 33% (2025) (Report p. 8).

The same pattern appears across other groups (CU non-PFI and non-CU members), reinforcing the report’s stated outlook that “primary status does not guarantee exclusivity,” and that credit unions need stronger digital value propositions and competitive positioning to prevent deposit diversification into fintech competitors (Report p. 8).

Online-only banks are no longer just a “young consumer” phenomenon. Adoption is rising fastest among 45+ consumers, and even credit union primary-FI members are increasingly holding online-only relationships, making this a deposit retention and share-of-wallet issue, not just a digital marketing trend.

Want the full picture (and the charts to back it up)?
Download the Geear Consumer Banking Preferences & Behavior Report (2022 vs. 2025) to see the complete dataset across 40+ charts, including breakouts by age and primary financial institution status, plus additional findings on digital behavior, security expectations, and decision drivers.

➡️ Click Here to Download the full report now