According to a survey recently commissioned by Finder, 23% of Americans own some form of cryptocurrency, reflecting an increase of more than 60% over the past two years. As consumer interest in digital currency grows, community banks and credit unions need to find ways to bring these digital assets and capabilities to their customers.

For forward-thinking financial institutions, cryptocurrencies not only represent an opportunity to capture new account holders, but to retain capital that could leave the institution when converted to crypto. Crypto services can help financial institutions grow and safeguard their businesses in the long term by attracting younger customers. And among existing customers, community banks and credit unions have a built-in advantage over fintechs and apps in the space: established, trusted relationships.

Banks can offer their customers a familiar setting in which to explore this emerging asset class, and thus gain market share from digital-only players. Crypto services also present an opportunity for banks to generate non-interest income via transaction fees associated with buying and selling digital currencies. First and foremost, these trusted financial institutions have an opportunity to educate customers about cryptocurrencies and their inherent risks.

Delivering essential knowledge to curious customers

Consumers have a plethora of questions about cryptocurrencies, and community banks and credit unions can play a valuable role in educating customers about this new asset class, thereby gaining trust, and potentially more business. Established customers who are curious but wary may be more inclined to incorporate cryptocurrencies in their portfolios if they can do so with the support of an institution they already know and trust. Moreover, banks can attract new customers who are interested in digital currencies and who prefer to engage via a financial institution rather than on their own.

Two of the most important areas for financial institutions to educate customers around cryptocurrencies are risk and taxes. Before buying digital currencies, customers need to understand that they are not deposit products, and therefore are not FDIC-insured. New cryptocurrency owners also may not be aware of their transactions’ tax implications; this is particularly relevant in the context of crypto’s notorious volatility. Customers who frequently trade these assets are subject to short-term capital gains tax.

Community banks and credit unions can help customers bridge the gap between the familiar and the unknown. From educational emails as tax season approaches, to a cryptocurrency FAQ on their website, there are several ways banks can help increase customers’ knowledge and comfort levels around this new asset class. Similarly, there are several ways for community banks, credit unions and their customers to engage with cryptocurrency services.

Establishing partnerships to navigate an evolving landscape

When it comes to offering cryptocurrency services to customers, banks have options. They can maintain custody of the assets themselves, integrate directly with cryptocurrency exchanges, or partner with fintechs that specialize in cryptocurrencies. At minimum, community banks and credit unions that have not yet introduced cryptocurrencies should explore ways to provide crypto wallet offerings that allow customers to buy, sell and hold digital currencies securely and in compliance with regulatory requirements. For many financial institutions, the most attractive way to accomplish this is by partnering with fintechs that can provide ready-made solutions at an attractive price point and that already know the crypto space well.

Partnering with crypto-native fintechs enables banks to leverage the fintechs’ expertise while retaining the business of their existing clients. For example, a turnkey solution can provide bank customers with access to a cryptocurrency wallet via their financial institution’s mobile banking app. The beauty of this arrangement is that each player sticks to its specialty: The bank acts as a partner to the customer, helping educate them and facilitate their engagement with digital currencies, while the fintech handles the custody and assumes the risk. Fintechs are also not subject to the same regulatory restrictions as banks, which means a partnership can expand the universe of products and services community banks and credit unions can offer to their customers.

As financial institutions of all shapes and sizes add cryptocurrencies to their offerings, it’s crucial to remember that flexibility is key. Today the focus is on digital wallets, but the asset class is already expanding to potentially include new products like cryptocurrency ETFs. The digital currency landscape is evolving daily, and banks need to adopt technology, such as open APIs, that will allow them to integrate with new partners and products seamlessly and efficiently.

To some consumers, “cryptocurrency” is still a buzzword they associate with internet memes, but as this asset class matures, community banks and credit unions need to integrate it with their other offerings in order to drive growth and remain competitive in the retail banking marketplace. Cryptocurrencies are here to stay, and can be pivotal to new access to capital and lending. Doing nothing is not an option for the small banking business.

Shuki Licht is the senior vice president and chief innovation officer at Finastra. He has more than 20 years’ experience delivering innovation-led products and has led global innovation agendas, process, technology and teams from ideation to production, and from concept to cash supporting millions of dollars of revenue, and has implemented artificial intelligence, machine learning, deep learning, computer vision, smart edge devices (IoT), blockchain, platforms, marketplaces and open application programmable interfaces to drive product differentiation, revenue growth, and addressing emerging markets.