Banks expect to grow deposits next year as they invest in upgrading digital services and defending against the growth in fraud, findings from the ProSight Banking Outlook: 2026 Trends survey show. Consumers expect to save more, too, but their confidence in their own financial picture is beginning to wane.
ProSight surveyed leaders at U.S. banks and consumers across generations. Mirroring the results of last year’s survey, deposit growth and new customer acquisition remain the top two business challenges for banks this year.
Most banks (82%) expect to grow deposits next year, compared with 61% in last year’s survey. Consumers expect to increase deposits and savings in the next six months, with Gen Z (55%) and Millennials (38%) the most optimistic. As trends toward lower fees entice consumers to change banks, institutions will have more opportunities to attract new customers, the survey showed.
Consumers’ confidence in their personal financial situation, however, is declining, with 44% expecting improvement over the next six months, versus 53% last year. Those anticipating that their deposits will decrease are most concerned about inflation, rent/housing costs and unemployment.
Deposit trends
While a minority of consumers express optimism about the economy (37%), retirement plans (35%) and inflation (29%) for the next six months, some within younger generations still expect to grow deposits and savings. Gen X and Boomer+, meanwhile, mostly expect static deposits and savings.
Those who expect their deposits to decrease over the next six months cite inflation—Gen Z (77%), Millennials (67%), Gen X (84%) and Boomer+ (85%)—as the biggest potential headwind. Across all generations, rent/housing costs were the second-most popular reason for an expected decrease in deposits, while Gen Z (37%) also worried about job loss.
Recent interest-rate cuts by the Federal Reserve contribute to the positive bias toward deposit growth. When the Fed cuts rates, deposits tend to increase because investments in securities and other assets lose some of their appeal.
ProSight’s internal projections (based on benchmark data) show deposit balance growth of 2% to 2.5% in 2025, thanks in part to the Fed’s October rate cut. If the Fed cuts rates again next year, we expect banks’ deposit balance growth to increase to as much as 3% in the first half of 2026 and 3.5% in the second half.
Bank promotions also are supporting deposit growth. Promotional money market deposit accounts opened over the past six months, for example, tripled for Millennials (to 12% from 4% last year) and doubled (to 12% from 6%) for Gen Z. The amount of MMDAs opened by Gen X and Boomer+ also doubled to 4% this year.
Consumers, moreover, opened more promotional savings accounts this year, with Gen Z rising to 18% from 10%, and Millennials ticking up to 16% from 14%. Gen X (7%) rose slightly, while Boomer+ remained flat at 4%.
Gen Z (44%) and Millennials (39%) also expect to hold excess cash or deposits to invest in the next six months, down slightly from last year. That number stands at 28% for Boomer+ (up from 21% last year) and held steady at 30% for Gen X.
When asked what they plan to do with any excess deposits in the next six months, the most popular response from all generations was “nothing much will change.” Paying down loans or lines of credit was the second-most popular response of all generations.
The battle for new clients
New customer acquisition ranked as the second-largest business challenge for banks. The landscape in 2025 remains extremely competitive, with large banks competing with regional/super-regional banks, community banks, credit unions (CUs) and direct or alternative banks for new customer deposits.
In 2026, opportunities to attract new customers are expected to grow significantly. Gen Z (35%) and Millennial (32%) respondents said they were either “definitely” or “probably” going to change their primary bank within the next six months—a leap from last year, when 20% of Gen Z and 21% of Millennial respondents said they planned to switch banks. Gen X (12%) and Boomer+ (7%) are much less inclined to make such a change.
Large banks remain the leading primary institution across all generations (accounting for 40% to 48% of all customers), ahead of direct/alternative banks for Gen Z, Millennial and Gen X respondents. Community banks and CUs, meanwhile, lost ground with Gen Z, falling from 12% last year to 9% in 2025. This is a potentially worrying sign for community banks/CUs, which lost ground with Gen Z not only to large banks but also to direct/alternative banks.
Though direct/alternative banks remain firmly entrenched as the second-most popular primary financial institution for younger generations, they actually lost ground with Millennials this year, falling from a 33% market share in 2024 to 22% in 2025.
Gen Z (33%), Millennials (42%) and Gen X (42%) cited “lowest fees” as the top reason to make a switch. Boomer+ (44%) chose “best rates” as their number one motivator, followed by lowest fees (40%). Cash incentives ranked as the third-most popular reason for Gen Z (28%) and Millennials (22%), while branch convenience took the third slot among Gen X (28%) and Boomer+ (30%) respondents.
Gen Z and Millennials, the generations banks are trying hard to retain, were hit with significant fees for overdrafts, nonsufficient funds (NSFs) and credit card delinquency over the past six months. Twenty-six percent of Gen Z respondents and 14% of Millennials said they have incurred overdraft fees, while 20% of Gen Z and 17% of Millennials were charged NSFs.
Both groups also incurred charges for late credit card payments (26% for Gen Z and 16% for Millennials), while Gen Z and Boomer+ incurred minimal charges across all three fee categories.
The quest for primacy: Cash incentives and other factors
Aside from setting competitive and transparent fees, banks that want to both retain customers and attract new clients in 2026 will need top-of-the-line digital capabilities (including AI), strong fraud protection, smart customer onboarding and savvy checking incentives.
Checking incentives proved successful in 2025. Thirty-four percent of Gen Z received a cash incentive for opening a deposit account in 2025, more than double the number (16%) from last year. Similarly, the number of Millennials (29% in 2025 versus 18% in 2024) who received cash incentives for opening an account grew significantly.
But welcoming new clients is only half the battle for banks. It’s extremely hard for banks to grow deposits without taking a proactive approach. Specifically, when a new customer opens an account, they should be made aware of all the online services (online banking, online bill pay, direct deposit, overdraft protection, Zelle, etc.) that a bank has to offer. Ultimately, if banks cannot convince customers to sign up for online banking and direct deposit, they risk losing clients and market share in an increasingly competitive and diverse banking landscape
Mark Riddle is Director, Research Intelligence Expert at ProSight.
