Remember that last app you thought would finally teach you how to invest your money and check off that box in your adulting to do list? Stash was created for people who don’t have a lot of financial experience but desperately want it, and they want it now. As of 2016, an estimated 2/3 of Americans couldn’t pass a basic financial literacy test, meaning they got fewer than four answers correct on a five-question quiz. 80% of U.S. adults agree they could benefit from advice and answers to everyday financial questions from a professional. When it comes to managing money, only 17% of millennials report feeling prepared. And out of all potential target audiences, millennials don’t just feel unprepared, they’re also extremely vocal about it.
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Stash has chosen to target millennials who want to explore the idea of investing their money but don’t want to risk losing it all. Millennials might not be financial gurus right now, but they are eager to learn the ropes, especially when it comes to investing. The problem is that many of them have been scarred by the Great Recession, and now they’re afraid to lose their precious, heard-earned cash. 49% of all millennials say that the 2008 financial crisis changed the way they think about saving/investing/spending.
NextGen (aka everyone born after 1980) audiences grew up in times of technological (r)evolution, but they are also financially inexperienced and afraid of risk, making them a fickly fintech target. So why has Stash been able to capture nearly 1.5 million customers and raise $80 million total capital in only 2 years? In frAGILE (a NextGen marketing bookzine), Joeri Van den Bergh and Katia Pallini conclude that as a result, NextGen interact differently with brands than their parents and grandparents. Stash hits the nail on the head of a couple key trends we uncovered and as a result has provided examples of opportunities where fintech as a whole can learn and build.
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6 things fintech can learn from the Stash success story
1. NextGen is always looking for having things done rapidly, easily, and hassle-free, making them a real shortcut generation.
Fintech must simplify their financial processes, previously seen by many as black boxes, into a few simple steps.
2. NextGen develop their identity through a cocktail of micro-interests which do not necessarily have to add up to one single focus point.
Fintech must adapt in order to cater to these seemingly scatterbrained passion points. Stash allows users to invest their money in as many contrasting causes as their hearts desire by allowing them to choose from over 30 ETFs (defined on the Stash website as an investment baskets bundled into a fund that is traded on an exchange – Exchange-Traded Funds). These investment bundles are separated into three categories: “I believe”, “I want” and “I like” allowing users to invest their money in as many contrasting causes as their hearts desire.
3. The notion of investment based on believing, wanting, and liking provides a nice segway into another NextGen attribute.
They are unpredictable switchers that use their own value system for choosing products and brands. Fintech can do this by connecting users to causes they care about. Stash has tapped into this insight by including ETF options such as “Do the Right Thing”, showcasing socially responsible businesses that make positive impacts on the environment, social, and governance issues; “Water the World” supporting global water companies; and “Small but Mighty”, standing up for small, capitalized companies that have room to grow.
4. Specific brands aren’t king anymore, like they were for GenXers and Baby Boomers; for NextGen, it’s about what you can DO with the brand/product.
By taking the focus off of brands, fintech can put it back on the individual and what he or she wants to accomplish. In Stash, the actual brands included in each ETF aren’t obvious on the interface. You only see them once you choose a specific category.
5. The infinite connectedness brought about by technological revolution has created an expectation for transparency—a democratizing of information.
Investing has traditionally been seen a competitive enterprise, available to those who have lots of cash. But in order to engage with NextGen, fintech must do away with this individualistic approach to finance and embrace a culture of collaboration. Brandon Krieg and Ed Robinson, Co-Founders of Stash, have not only made investing simple, as explained previously, but they have gone to great lengths to provide ample information to Stash users, through an in-app “Learn” page featuring articles that answer questions as basic as “What is a hedge fund?” and “What’s the CFPB?” Stash also created its own podcast, “Teach me How to Money”. Through the democratizing of investment information, Krieg and Robinson have created a sharing culture from the top down.
6. What makes Stash a disruptor in the fintech landscape is this—not only have users accepted this sharing culture from the top down, but they’ve also embraced it from the bottom up.
Stash investors have created a collaborative Facebook group dedicated to providing each other with investment advice and sharing their own experience with each of the different ETFs. What’s going on here? Users are mimicking brand culture behavior, and this is the ultimate indicator of brand identity fit, especially in a category where sharing information is not a commonly adopted behavior.
Fintech has an opportunity here, and it starts with listening to the NextGen voice. Stash did this, and now it’s valued at $240 million, according to Business Insider. That’s a lot of money…but the look on your dad’s face after you’ve just brought up the dividend yield on your Blue Chip portfolio at the holiday dinner table, that’s priceless.
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