Microinvesting app Stash just launched a new feature set that looks awfully similar to a banking app.
Stash introduced a series of features primarily aimed at helping its users put savings on autopilot. Now, when customers spend using their Stash app, Stash will round-up the purchases to the nearest dollar. Once the round-ups total hits $5, Stash will transfer the spare change to the customer’s personal investment account.
In addition to Round-Ups, the company rolled out Smart-Stash, which analyzes a user’s spending and earnings patterns to test for a build up in cash. If certain thresholds are hit, Stash will automatically move money into savings.
The company also introduced a cash-back feature. Stash has over 3 million users.
“It’s not just about a feature set,” said Brandon Krieg, CEO & co-founder of Stash.
“Helping people get started saving, in whatever way is most convenient for them, has been core to our mission. By automating saving tools — whether Cash Back, Round-Ups or Smart-Stash — STASH customers can save more money and invest for a better financial future.”
Rival Acorns has long used a round up feature to encourage its users to save more. Investing apps that target the average Joe have learned that the lack of stock market participation in America isn’t an investing problem — it’s a savings problem. If you can encourage users to save for their futures by automating the proper behavior, it’s much easier to deploy this money into investments.
So, it’s no surprise that Stash rolled out bank accounts last year. Its new cash optimization tool Smart-Stash is similar to the feature Betterment introduced in December 2018. Popular millennial investing app Robinhood clumsily announced a banking product recently, too.
Meanwhile, fast-growing banking apps like Revolut, N26 and Chime have introduced or will soon introduce investing features to their banking customers. In a recent webinar with executives from these firms, Tearsheet learned that the product roadmaps for these challenger banks include more investment features.
The underlying message is clear: if you can help users save more, they’ll invest more.