- Key insight: Community banks and credit unions are turning to fintechs like Swaystack to boost their onboarding and direct deposit technology.
- What's at stake: Small banks seeking primary status in customer wallets are competing with digital-first banks and fintechs.
- Expert quote: "The first 60 to 90 days of a relationship are increasingly viewed as the make-or-break window, and better onboarding tools are one of the most measurable ways to improve that outcome." — Jim Perry, Market Insights
Two years ago, bank tech entrepreneur Har Rai Khalsa was talking to an assortment of community financial institutions and encountered a common point of friction across his conversations.
"Banks and credit unions told us that they were really struggling after accounts were opened with getting them activated, fully utilized and onboarded," he told American Banker. "They said, 'We want to win their deposits. We want to win their paychecks to come in the future, and we want to win their recurring payments and transactions.'"
Khalsa saw an opportunity to build a new digital onboarding tool specifically for the smallest banks and credit unions.
The fintech founder was introduced to the world of community banking when he joined the Independent Community Bankers of America's
His new company, an onboarding software startup called Swaystack, went live in April 2024 and has accumulated 18 clients in the last 22 months.
"We have 10 credit unions and eight community banks," he said. "The largest community bank is $7 billion in assets and the largest credit union is $4 billion in assets, but we have clients all the way down to $100 million in assets."
Attracting new customers, and their direct deposits, is top of mind for bank and credit union executives alike going into 2026. A
Jim Perry, senior strategist at Market Insights, told American Banker that one way for financial institutions to attract, and retain, customers is through improving the onboarding process. Onboarding refers to the series of steps during and after an account is first opened that establish the relationship between customer and bank, such as enrolling in digital banking or setting up an ACH direct deposit.
"Banks now have enough data on digital account openings to see the pattern clearly: Without a robust onboarding strategy, many of those new deposits simply don't stick around," Perry said. "The first 60 to 90 days of a relationship are increasingly viewed as the make-or-break window, and better onboarding tools are one of the most measurable ways to improve that outcome."
For small banks and credit unions seeking to digitally upgrade their onboarding process, Swaystack offers a customizable software that institutions can attach to existing online banking platforms, according to Khalsa.
"We endeavored to build an onboarding 'switch kit' of sorts that could help a newly joined customer bring over additional deposits, their paychecks and their recurring card transactions," he said.
According to Khalsa, Swaystack is a later-stage onboarding software provider and does not provide account opening software. Digital onboarding fintechs that do provide account opening services for banks and credit unions include
Swaystack also competes with direct deposit-switching fintechs such as
One Swaystack client, Wisconsin-based Kohler Credit Union, added the fintech's onboarding tools to its tech stack in early 2025 after meeting a Swaystack executive at a conference.
"I spend a lot of time talking to vendors in the fintech space to find out how I can keep Kohler Credit Union competitive with the big players out there," Kohler Chief Information Officer Matt Fehrmann told American Banker. "Especially when it gets into the neobanks, the Chimes and the Venmos: How do we continue to remain relevant in a modern financial society?"
The credit union's initial goal was to prompt existing digital banking customers to enroll in electronic bank statements, which would both improve efficiency and save on physical mail expenses.
"We had a large population of people that had digital banking but they weren't using e-statements," Fehrmann said. "We could never reconcile that. If you're already logging into an app, why not just get your statements there?"
When Kohler CU launched Swaystack's digital onboarding tools and sent out prompts via email, Fehrmann said that he saw a 50% increase in e-statement enrollment among existing digital banking members. The credit union also tracked a 24% increase in newly opened accounts that immediately set up direct deposit.
Among a test group of digital banking accounts at Kohler, the credit union saw 78% more debit activity over the first 30 days of opening an account and netted about $1.4 million in annual direct deposit volume increase across 51 accounts, according to Fehrmann.
"I truly believe that comes back to engagement," he said. "That's the purpose of this platform, to engage our membership."
Not long after Swaystack and Kohler started working together, the credit union encountered another use case for the fintech's products: onboarding an influx of new members from a recently inked M&A deal.
"We merged in about 10,000 new members three months ago," Fehrmann said, referring to a merger between
Within those enrollments, the credit union also captured 25 new direct deposit accounts in the first month after the merger was finalized.
"People want engagement, and they want simple engagement," he said. "That's what Swaystack brings."
Two additional Swaystack clients who shared their experiences with American Banker used the fintech's customizable onboarding platform for other types of use cases.
Minnesota-based Think Bank uses Swaystack primarily to drive direct deposits, as that is the metric the 2.1 billion-asset community bank uses to determine primary financial institution, or PFI, status among its customer base. About 70% of Think Bank households currently meet the bank's PFI deposit and transaction criteria for their checking accounts, according to Chief Marketing Officer Chad Murray.
The bank went live with Swaystack in September 2025. "For customers who opened their first checking account as a primary [account] with us in September or October, at the end of the year about half of them had electronic ACH deposits," Murray told American Banker.
"We really leverage our digital account openings process, and our partnership with Swaystack, to get that account open, funded, activated and then on its path to that primary financial institution status," he continued.
Oklahoma City-based Communication Federal Credit Union serves a significant portion of its member base indirectly through auto loans at partnered car dealerships. Laszlo Tallai, the credit union's senior vice president of growth and innovation, told American Banker that the main focus was smoothing out the registration and onboarding process for indirect lending members.
"For members we were onboarding through the indirect lending channel, we saw the digital banking enrollment percentage within 30 days of loan origination hit 58% with Swaystack (combination of email and hosted registration flow) versus 36% with the combination of physical mail and email onboarding," Tallai said, in reference to an AB test group. "In addition, the average time from loan origination date to digital banking enrollment is 7.6 days for members onboarded through Swaystack versus 15.4 days for members onboarded via the prior method. The impact was so clear that we switched all indirect lending onboarding to Swaystack just to improve that experience."
For Communication Federal, according to Tallai, improving the loan onboarding process also helps the credit union recruit indirect loan members toward its digital banking products.
"When we ask them to do more business with us, they're likely to accept that offer because they saw how seamless and easy it was to get set up with their loan," he said.
Perry noted that modern consumers are used to seamless, app-first experiences in other areas of daily life, so when a community bank or credit union still requires manual PDF forms or trips to HR to set up a direct deposit, that friction can be "increasingly out of step."
"Many smaller institutions are realizing that overhauling their onboarding and direct deposit technology was something they'd put off for too long and that they were paying a price for failing to make it a priority," Perry said. "The growing attention to onboarding tells me that bankers are recognizing the battleground has shifted from 'Can we open accounts online? to 'Can we make becoming, and staying, a customer effortless?'"
