Robinhood Clearing


(Big Boss) #1

Fresh off the Robinhood press today - they have developed and will be slowly rolling out their own clearing system!

I think this is a pretty incredible achievement for a startup and is definitely aligned to their clients’ interests.

Wonder if Freetrade have feature this in their own roadmap? Maybe 2020 after we’ve conquered Mars? :smile:


(Rob Nicholson) #2

Interesting! Yeah I guess it would have to be very long term if Robinhood are only moving into it now…

I’ve seen ClearBank’s shaking up clearing in the UK banking market; whilst this is a different kind of clearing you can get the impression from their story of how expensive and complicated it is to setup with all the regulations! They raised £50m+ to do so, the founder previously founded Worldpay and so already knew the regulators etc…


#3

The TechCrunch article has more details:

  • 6 million accounts up from 4 million just 5 months ago
  • this was started at least this 2 years ago
  • they have a team of 70 people on this
  • in the next 5 years there is plans to offer “…everything from Robinhood that you could get from walking into your local bank.”

(Alex Sherwood) #4

I wonder what benefits bringing clearing in-house gives them in the background too..

Now that’s interesting (you knew I’d like that :wink:) what if stockbroking was just a smart acquisition strategy for a business that wants to (at least partly) be a challenger bank? It’s definitely been more effective than the other approaches that’ve been tried in the US.


#5

Bloomberg reported Robinhood was discussing banking products with regulators a few months ago. I don’t know, feels like they could focus and get more market share as a stockbroker. But then again US Banking needs someone to disrupt it. Their IPO will be interesting for a lot of reasons.


(Adam) #6

We’re already self-clearing in the UK and are the direct custodian of our clients’ assets. The equivalent of DTCC in the UK is CREST, which we are members of. Just saying.


Robinhood
(Big Boss) #7

Show off! :sunglasses:

What about US or ex-UK stocks when we start to introduce them to the app?


(Big Boss) #8

I was thinking Square was going to go into banking with its Cash App, but they’ve had some stumbling blocks. Doesn’t seem all that easy!


(Adam) #9

We won’t be going full-stack in every international market anytime soon, but you might find this article interesting: https://the-international-investor.com/investment-faq/crest-depository-interest-cdi