A year and a half into the COVID-19 pandemic, digital financial services are a major part of most consumers’ daily lives. To illustrate this shift, an October study by Plaid found 88% of U.S. consumers used fintech in 2021, a 53% year-over-year increase. What’s more, among those who used digital financial services tools, consumers who used investing platforms exhibited the highest confidence of all use cases for fintech, according to the study.

As digital financial services platforms become more mainstream, regulators are keeping a closer eye on the benefits and risks they present for customers. Amid the growth of consumer interest in investing and trading — partially spurred on by this year's "meme stock" craze — and the rise of crypto, investing and banking app Stash wants to play the role of a trusted intermediary, helping expose its customer base to new tools while emphasizing the importance of regular and diversified investing for the long term.

"The biggest thing with meme stocks and investing moving more into mainstream news is customers feeling like they're missing out," said Claudio Esposito, Stash’s senior vice president of product. "It wasn't always as much about the specific stocks like GameStop; it was more just hearing so much in mainstream news, it was a jump-start for a lot of people to say maybe now is the time to get started."

Like other digital financial platforms, Stash, which was launched in 2015, saw its user numbers and assets grow during the pandemic. The company, which has raised $467.1 million in funding, said it now has 6 million customers and 2.3 million active subscribers. Customers, to date, have set aside $3 billion, and weekly set-aside amounts grew 50% compared with pre-pandemic figures. (Customers make regular, automatic deposits of $31 on average, the company said.)

As customers crave to know more about financial services topics in the news, and how to explore new ways of investing — including through crypto and stocks — Stash said its mission is to expose its customers to new tools responsibly.

"The way we think about it is how do we get someone to not think about [getting into] day trading, but think about setting up the right tools and using the right habits to build wealth over time," said Ed Robinson, Stash's co-founder and president. Stash’s customers are typically in their mid-30s and earn an average annual income of around $50,000.

Stash generates revenue from subscription tiers of $1, $3 and $9 per month, with the highest tier offering a bundle of personalized advice; investing (including smart portfolios and custodial accounts); banking (in partnership with Green Dot) alongside "Stock Back" fractional-share rewards; and life insurance. 

Looking to 2022, the company said it’s working on introducing crypto into its smart portfolio offerings; continuing to focus on "Stock Back" fractional-share rewards; and refining the client onboarding process to ensure it’s as seamless as possible.

The company didn’t offer details on a specific launch date for introducing crypto into Stash’s smart portfolios, but Esposito said Stash intends to ensure it has guardrails around it.

"[We want to] use that as a jumping-off point to learn about whether it’s sufficiently meeting [customers’] needs or do we need to build and do more above and beyond that to support crypto, but do so in a way that is true to our mission where we're surrounding it with, with education and advice as part of the offering," he said.

On "Stock Back" rewards based on card transactions, the company said it intends to ensure the offering is accompanied with clear explanations, so customers can understand how it fits into their broader wealth-building plans.

"The biggest thing we've been working on addressing is just how do you explain this sort of unique rewards program in a simple and compelling way," Esposito said. "People understand conceptually what a rewards program and cash back is, but finding the right words to say, ‘Well, it's that, but it's more than that because you're earning stock in the brands that you love.'" 

For Stash, "Stock Back" is an important way to encourage consumers to start investing because 30% of customers who earn "Stock Back" make a follow-on investment in those brands, Robinson said.

Effective communication is also a lever the company wants to use to help smooth the client onboarding process.  

"One of the biggest learnings for us in terms of improving our onboarding was making sure that we give context to the information that we're asking for and why," Esposito said. "Obviously there's personal information we need to be able to open [accounts] and we found that the biggest thing is people want context."

Stash sees its banking offering as more of a means to an end, which is to help clients build wealth over time.

"Managing your wealth and your cash flow is a big part of wealth building in general," Esposito said. "[We] think about how investing or saving for retirement fits into that. They're all key pieces to that puzzle to help our customers build wealth for the long term."