Saturday, August 6 2022

  • British neobank Revolut has obtained an American broker’s license to participate in the retail boom.
  • But Revolut is at an earlier stage of maturity in trading compared to other digital brokers.
  • Insider Intelligence publishes hundreds of information, charts and forecasts on the Fintech industry. Learn more about how to become a customer.

Great Britain

The giant has secured a US brokerage license to capitalize on the retail boom that has made Robinhood into household names, according to CNBC.

digital brokerage users

Insider Information

Revolution spear its banking services in the United States in March 2020 thanks to a partnership with the Metropolitan Commercial Bank then added cryptography trade in July of the same year. It already offers stock trading in the UK, where it offers one commission-free trade per month to standard users before charging costs.

Revolut faces stiff competition from established digital brokers, and retail may have already reached its peak. Digital brokers in the United States have added more than 20 millions new accounts since the start of the pandemic, while Revolut has close to 1 million clients in the US who will have instant access to its stock trading service, many of them are probably already using another digital broker and have little reason to change:

  1. The neobank plans to generate revenue on payment for the flow of orders like Robinhood does, which means it is unlikely to differ on prices.
  2. With the wide array of options to choose from, retail traders expect more than just stock trading from their digital brokers. Robinhood, for example, plans to add longer-term wealth building tools that complement day trading, such as individual retirement. accounts and recurring cryptography investments.

And the windfall of mass users over the past year has abated. Lockdowns have been a big culprit in encouraging everyday consumers to start trading. But now that they have been vaccinated, many are to walk away from their screens and resume pre-pandemic activities.

DriveWealth, which powers the underlying infrastructure for equity trading for fintechs, including Revolut for the UK and now the US, reported a to slow down in trade for April and May following the first quarter record.

And in its public documents for the second quarter, Robin Hood shared that equity-based trading income actually fell 26% year-on-year to $ 52 million, pushing crypto trading to account for more than half of its trading income.

Revolut is at a different stage of maturity in trading compared to digital brokers. As it seeks to attract its first trading clients to the United States, Robinhood and its ilk are launching more advanced trading features for their already massive user bases. This glaring difference creates a difficult course for Revolut to catch up.

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Revolut obtains a retail broker-dealer license in the United States

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