[ad_1]
There’s a new kid on the banking block.
Robinhood announced earlier this year that it will offer banking services for premium members this fall, and CEO Vlad Tenev was asked about how his upcoming project will compete with long-standing finance companies, including JPMorgan and Mastercard, at the All-In Summit.
Robinhood’s banking and wealth management service will provide “access to traditional checking and savings accounts with luxury benefits,” according to a press release from March. The banking feature will include cash deliveries, international transfers, estate planning services, and whole-family accounts. Robinhood is not insured by the Federal Deposit Insurance Corporation, which protects deposits when banks fail.
“If you think about an incumbent, they have certain benefits,” Tenev said on an All-In podcast episode of the conversation that aired September 15. “They’re very muscular from a regulatory standpoint, like they know how to deal with regulators; they’ve got global scale; they’ve got tens, hundreds of millions of customers; lots of assets.”
Robinhood has faced investigations from federal regulators in the past, and the Securities and Exchange Commission dropped its investigation into the company’s crypto unit in February. Yet Tenev said smaller players like himself will also have certain advantages over the big banks in the near future.
“The disadvantage is that they’re sometimes slow to adopt new technologies, they don’t have the best engineering teams, they can’t move very fast, they can’t hire the best talent,” he said. “We don’t have those downsides. We have great talent, we move really quickly, we use the best technology.”
Banks have worked to scale up their technology chops in recent years, all as the talent wars have reached a fever pitch.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
Tenev said that as Robinhood has rolled out more features, like retirement accounts and a credit card, users put more money into the app.
“So then that gets to a future where we ask ourselves, can we be your comprehensive financial platform?” he said. He posed the hypothetical of putting your direct deposit and other funds into the platform.
Robinhood has $304 billion in total platform assets, according to its website, which Tenev said was “a drop in the bucket compared to what’s going to happen.” By comparison, JPMorgan, the largest American bank, had $4.6 trillion in assets as of its second-quarter earnings.
Robinhood’s stock was up more than 189% year-to-date as of September 15.
As Tenev put it on All-In, “It’s a question of, can we get the benefits of scale while also maintaining the nimbleness of a technology startup?”
[ad_2]
Source link
