Robinhood Releases Clearing Solution
The popular brokerage U. S. based company Robinhood has announced yesterday, October 10, that it has been developing a trade clearing system called “Clearing by Robinhood”.
This new system is meant to let clearing and settlement of transactions be made on the trading platform. The system, Robinhood affirms, will make the service faster and more reliable.
Introducing Clearing by Robinhood. It’s the only clearing system in the last decade to be built from scratch.
For you, this means:
▪️ Fewer fees
▪️ Improved customer support
▪️ A better overall experience
— Robinhood (@RobinhoodApp) October 10, 2018
In its press release, Robinhood affirms that the company has been working in the past five years to democratize the financial system of the United States and that it has expanded from stock trading to be a complete investment platform with a commission-free investment of ETFs, options and cryptos. Now, the company wants more.
To speed up the system and make it more efficient, the Robinhood company has built its own clearing solution, which uses licenses from the FINRA, the DTCC and the OCC. The system will involve almost 100 people specialized in compliance, the report affirms.
With the affirmation that this is the only clearing system built from scratch in the last decade with modern technology, the company remembers that, since 2008, when Vanguard did something similar, nobody was able to pull off such a feat.
Robinhood Vows To Lower Fees Even More
Users can rejoice with the announcement that the company is focused on removing and lowering even more small, but frustrating, fees. For instance, the example given was that reversal fees used to cost $30 USD while now they will only cost $9 USD.
The company has also improved the customer support to help the clients with any kind of issue to get quicker responses from the support team and has worked to expand its services.
For instance, the press release affirms that the tax documents and the monthly account statement systems were completely redesigned to be easier to use.
Why Is This Important?
It is important both for the company and for the customers, albeit for different reasons. One of them is that Robinhood will have more control over its company as it does not need third-party clearing anymore, which can improve the management over the services.
The main reason for the users to be excited about the changes is because the company will charge them less money. Robinhood is already well-known for offering services which are cheap and focusing on the user experience of the client and it looks like this new update will be a further step in this direction.
That said, it is also remarking that the company did the effort of doing it since this is nothing that any company has made in the last 10 years and it is a system that uses modern technology.