Stoa turns idle cash into a new everyday utility

British consumers could soon use their idle cash to access cloud storage without actually spending their money, under a new proposition being launched by fintech Stoa as financial services increasingly move beyond traditional banking and into the everyday products and services people regularly use.

Stoa Cloud will allow customers to place money through Stoa and, in return, receive cloud storage for one, two or three years, creating an alternative to paying for another monthly digital subscription while giving consumers another way to put cash they already intend to hold onto to work.

Stoa is not a bank. Customer deposits are held with its UK partner banks, with eligible deposits protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per eligible depositor, per authorised bank.

The proposition forms part of a wider shift in financial services which is seeing fintech businesses move beyond current accounts, cards and conventional savings products, increasingly connecting customers’ money with services that would previously have been bought separately.

Revolut, Monzo and Starling have all expanded into mobile connectivity and eSIM services, while Stoa believes cloud storage could become the next everyday digital utility to be connected directly to people’s finances.

The launch also comes at a time when many consumers continue to receive relatively modest returns on readily accessible cash, with the latest Bank of England figures showing that the effective interest rate on outstanding sight deposits was 1.65% in July, compared with 4.21% on new time deposits.

Rather than simply competing for customers by chasing the highest headline savings rate, Stoa’s proposition is designed to give consumers another option, allowing them to use the value generated by money they are already planning to hold to access something they might otherwise pay for separately.

Cloud storage has increasingly become another regular household digital expense as consumers build ever-larger libraries of photographs, videos, documents and other data online. Apple, for example, currently charges UK customers £0.99 a month for 50GB of iCloud+ storage, £2.99 for 200GB and £8.99 for 2TB, with higher-capacity plans also available.

The technology behind Stoa Cloud will be powered by Synchronoss Technologies, a leader in personal cloud solutions. Synchronoss provides secure, scalable white-label cloud technology used by leading telecom operators across the globe, including AT&T and Verizon.

Pat Doran, Chief Executive Officer of Synchronoss Technologies, said:

“Personal cloud has become part of everyday digital life, but the way consumers access it is still largely tied to another monthly subscription. Stoa is challenging that model by connecting the value of an existing financial relationship with a digital service people use every day.

“This partnership demonstrates how Synchronoss can help trusted brands beyond telecom use a proven, scalable personal cloud platform to create differentiated services, deepen customer relationships and bring new digital propositions to market quickly.”

Mike Saraswat, Co-Founder of Stoa, said: “Most financial products still assume that the only thing a customer wants from their savings is a rate of interest, but we think there is a much bigger opportunity to make that money work harder in people’s everyday lives and provide value in ways that go beyond simply paying another percentage point.

“Cloud storage is a good example because it has quietly become another subscription that millions of us need to think about alongside streaming, mobile phones, insurance and other regular household costs, yet until now there has been very little connection between those everyday digital services and the money people already have sitting in idle cash.

“The question we’re asking is, if you’re planning to hold onto that cash anyway, could it give you something useful today rather than simply sitting there?

“We’ve watched fintech businesses expand into areas such as mobile connectivity and eSIMs, and we think cloud represents another natural extension of that trend, because the lines between banking, subscriptions and the everyday digital services people use are increasingly starting to disappear.”

The company plans to make Stoa Cloud available both directly to consumers and through distribution partnerships with businesses that already have significant customer bases, opening up the potential for the proposition to be offered through banks as well as supermarkets, energy suppliers, insurers and travel companies.

For those businesses, the model offers a way to provide cloud storage as an additional customer benefit without having to develop or operate their own cloud infrastructure, while potentially creating a new way to build loyalty beyond traditional discounts, cashback schemes and reward points.

Synchronoss enables service providers to launch branded personal cloud services that support automatic backup, storage, synchronization, cross-device access and content management. Through Stoa, that same platform can support a new distribution model in which financial institutions and major consumer brands can incorporate personal cloud into a broader customer proposition without having to build or operate the underlying cloud service themselves.

Mike added: “We don’t think the next generation of financial services will stop at current accounts, cards and savings rates, because the much bigger opportunity is to connect people’s money with products and services they genuinely use and would otherwise be paying for elsewhere.

“For the consumer, that might mean looking at £5,000 or £10,000 sitting in an account and asking not only, ‘What interest is this earning?’ but also, ‘What else could this money be doing for me?’ Stoa Cloud is the beginning of that.”