- Robinhood announced the launch of its own private clearing service on Wednesday.
- The new service demanded to build a team of 70 people in its new Major Oak clearing center in Florida.
- The two-year effort will allow a zero-rate broker to save money and make better deals for their clients, said a business broker expert at Business Insider.
- In an interview, co-founder and CEO Vlad Tenev explained the Robinhood struggle to become an Amazon of personal finance.
Robinhood, a zero-rate stock trading application that helped get you started races to the bottom in brokerage fees, has a new weapon in his arsenal, as he fights to become the Amazon of personal finance: the internal clearing system.
The launch of $ 5.6 billion announced on Wednesday that he completed two-year efforts to create and launch his own clearing provider that will save him money and improve trading for his 6 million customers, co-founder and CEO Vlad Tenev told Business Insider,
“This will allow us not only to clear and settle transactions, but also the assets of all our clients, not to depend on any third parties,” Tenev said in an interview. “Over the past five years we have reached a huge scale, and because at first we are proud to be a technology company, we said that it may be time for us to actually build our own systems from scratch using modern technologies.”
Jessica Holscher, Head of Department investor.com, a site that considers brokerage and investment advisors, says that self-cleaning comes down to control.
“If you are self-cleaning, you do not need to depend on third parties to provide operational support (you can manage the processes of new accounts, process money movements, etc.), you can determine which services and products to offer, and you do not need to rely foreign technology (or data), ”Holscher told Business Insider.
"There is a significant need for capital for self-purification, as well as the enormous human investment necessary to cope with all that the Guardian (thinks about IT, operations), but if they are large enough and can afford it, self-purification generally gives them full control over their business, ”she continued, noting significant savings after the initial“ significant ”investments.
Robinniti declined to say how much investment is needed in the clearing system, but noted that he hired a staff of 70 specialists at his new Big Oak clearing center in Orlando, Florida, nodded to a famous tree in Sherwood Forest, where Robinstva’s fictional character. Previously, the Robinhood deal was executed by Apex Clearing based on Dallas.
“No one has done this before,” said Christine Hall, head of the Robinhood product department for the new clearing service, in an interview. “There is no plan or reference book to say:“ You are building a clearing system, here’s how to do it, ”so we had to build a lot of experience inside ourselves.”
Tenev said Robinia is still looking at IPO, repeating statements he has been making for years. He declined to elaborate on the potential duration of the company’s work for public advertising. Until then, the company is looking at a five-year roadmap that will allow Robinhood to offer its customers a complete list of financial products, in addition to trading stocks and crypto fibers.
“After five years, you can open Robynniti and get everything you can, go to your local branch and get it,” said Tenev. "Just as you think of Amazon as the best value, place, and experience to buy something online, Robinhood should be home to all your financial needs."