The data: The marketing divide between the largest and smallest banks is growing.

Median marketing budgets increased across every bank asset tier compared with last year except banks with less than $150 million in assets, according to an ABA survey.  

Banks with more than $3 billion in assets grew their budgets the most.

Why it matters: Smaller institutions are trimming their marketing firepower at a time when they are already struggling to win the next generation of customers.

Community institutions' share of Gen Zers' primary banking relationships fell to 9% in 2025, per ProSight Banking Outlook. Meanwhile, neobanks' share nearly doubled from 8.9% in 2024 to 17.2% in 2025, according to an EMARKETER survey.

A widening marketing gap could make those losses harder to reverse. 

It also leaves smaller institutions more exposed to digital newcomers. Community institutions don't just need competitive products and digital experiences; they need prospective customers to know those offerings exist. 

As large banks and neobanks compete aggressively for attention, smaller institutions risk worsening a visibility shortfall on top of their scale disadvantage.

Implications for smaller banks: Trying to match larger competitors' marketing spending dollar for dollar isn't realistic. Instead, smaller institutions need to make their acquisition budgets more effective.

Community institutions can focus acquisition spending where their local presence and relationship-based service can matter most—such as small-business banking, local industry banking, homebuying, or in complex financial decisions where customers may value local knowledge and access to an in-person banker.

They can also use digital marketing to amplify those strengths with tactics such as telling local impact stories and customer success stories. 

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