"You can’t just try to build the next JPMorgan. "We’ve always had the same mission of getting people off the sidelines, he said. Stash said it has no plans to become a bank, and the move to become a central financial hub is something Stash customers have been demanding, Ed Robinson, co-founder and president, recently told Tearsheet. "Banks are not connecting with Generation Y and Generation Z, and neither are traditional online brokers, so for that reason, it's fair game for fintechs," said Aite senior analyst Javier Paz. Beyond the underbanked population - the latest FDIC numbers count 24.5 million households in this category - Stash is aiming to grow its reach among a population that doesn't feel well served by major banks. By growing its product offerings beyond investments, Stash is aiming to increase customers' interactions with the platform - a customer retention and acquisition move. It also offers clients personalized investment advice.ĭespite the quick growth of startups moving into banking, the underserved population is big enough for Stash to make inroads - a market size it claims is as big as 100 million. Stash's microinvestment platform is designed to help users who maintain a $5 account minimum create automated deposits into savings and investment accounts.
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Stash plans to do that by offering a bank account that doesn't charge overdraft fees and gives customers access to a "large network" of free ATMs across the U.S. "We want to alleviate those stresses and create an environment where the client knows and feels that the institution is working harder for you, and teaching you along the way." "Our clients are paying up to $300 a year in banking fees," she said. While the field of startups offering banking products is getting quite crowded - the growth of banking-only startups like Chime and Varo also adds competitive pressure - a Stash spokeswoman said banking has always been part of its plan to offer a full-service financial platform for "an underserved market." The average age of a Stash customer is 29, with an annual household income of $45,000 - a population traditional banks don't reach effectively due to high account minimums, and it's a consumer group that's often not considered very profitable by big banks. The 3-year-old startup is the latest investment company in the space to extend its reach into banking, following MoneyLion, Wealthsimple and SoFi, all of which have similar product roadmaps. Stash Invest is the latest non-bank fintech startup to create banking products for customers with the upcoming summer launch of its checking accounts and debit cards.
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