Financial services platform Robinhood (HOOD) has announced its plans to launch in the UK. Yahoo Finance’s Brian Sozzi sat down with CEO Vlad Tenev to discuss the launch, the global market, and what Robinhood is doing to lead innovation in the market.
Regarding the push to launch in the UK and EU, Tenev states that “people overseas need it even more than in the US” due to the fact that some areas lack banking infrastructure. When it comes to specifically the UK launch, Tenev says he is focused on "solving one, particular pain point, which is we want to be the best place for people to access the US dollar and the US equity markets in the UK."
Discussing the company's “24 hour market,” Tenev says that "it increases the overlap between the hours that Robinhood is available for real-time execution and the waking hours." When asked about the push to make the 24-hour market an industry standard, Tenev says "it will be the industry standard, someone just has to do it first, and in that case, Robinhood was the first to push that innovation forward." Tenev notes one current challenge is the issue of "clearing over the weekend," which Tenev says he is "keen" to take on.
When it comes to the retail investor, Tenev says they are starting to "wake up to certain segments" and that there has been a "ground swell" of crypto activity as the price of bitcoin rises.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
[AUDIO LOGO]
BRIAN SOZZI: Robinhood is looking for growth overseas, recently saying they will launch in the UK. Let's get right to co-founder and CEO of Robinhood, Vlad Tenev. Vlad, good to see you in-person for a change in our new studio.
VLAD TENEV: Thank you for having me, Brian.
BRIAN SOZZI: So the UK launched. Tell us a little bit about it and how important it will be to Robinhood.
VLAD TENEV: Yeah. I mean, from the very beginning, when Baiju and I created Robinhood and got the idea for it as immigrants, the long-term vision was to make our services available to everyone all over the world. And we think we have certain advantages in doing that. We're a technology company. We don't expand with brick-and-mortar branch offices everywhere. And we've spent a lot of time, particularly in the past few years, investing in the core platform. And I think people overseas need it even more than in the US.
Here, due in part to the great work that we've done in disrupting the financial system, people are relatively well-served. But overseas, you have a lot of people that don't even have access to a functional banking system. So we'd like to help them starting with, of course, the UK and EU and then expanding beyond.
BRIAN SOZZI: How do you build out? What are some of the, I guess, the most pressing needs of investors in the UK? And how will you build out the platform?
VLAD TENEV: Launching in the UK, we want to be very, very focused on solving one particular pain point, which is we want to be the best place for people to access the US dollar and the US equity markets in the UK. And what that looks like to us, aside from the industry-leading economics and industry-leading customer experience, is launching new innovative features that you just can't see elsewhere.
So one example of that is 24-hour market, which I spoke to you about when we launched a few months ago. So because we're expanding to the UK with our core platform, the benefits and things we're building for the US accrue to UK customers. 24-hour market is one good example, because it increases the overlap between the hours that Robinhood is available for real-time execution and the waking hours.
So a customer in the UK, when they're awake, will have access to real-time execution on a wide universe of US-listed stocks.
BRIAN SOZZI: Why isn't 24-hour-- why isn't that the industry standard? This is 2023. We're almost on the verge of 2024. It seems ridiculous it's not.
VLAD TENEV: Well, it will be the industry standard. Someone just has to do it first. And in that case, Robinhood was the first to push that innovation forward. There was a lot that needed to be done, both on the technology side and user experience side, to make it a reality. Having different markets centers stitched together seamlessly, so that a customer can place an order, and not have to understand the details of how those orders are being routed between different areas, having the overnight session work seamlessly, these are all things that took a while to build and get the experience just right.
But you're seeing the actual benefit of that in recent days and weeks. When you look at the share of screenshots on Sunday nights and late at night that are posted about stocks, Robinhood is taking the lion's share of that. I'm sure you saw that last night with crypto prices going up, Bitcoin crossed 40,000, customers were curious what crypto stocks were doing during that time period. And Robinhood's one of the only places that allows that type of visibility and allows you to actually transact and manage risk during those hours.
So to have truly around-the-clock seamless trading, we have to solve the clearing over the weekend problem. And historically, there hasn't been much of an impetus to actually solve that. And that's something that I'm keen to take on. I do believe part of my role is rather than just in addition to growing Robinhood, making our product as good as possible, I think, as leaders of the industry, we have to push the industry forward. And I think we love being entrepreneurs in America. And it's very important to me for our capital markets to continue to be the most vibrant and innovative. And so I think we'll solve this problem one way or another.
BRIAN SOZZI: Soon, is it soon?
VLAD TENEV: I'm excited to push in and lead the charge forward there.
BRIAN SOZZI: Is it soon? In our lifetime, are we 24/7?
VLAD TENEV: I hope it's soon. I think the big problem for 24/7 would be figuring out clearing over the weekend. But I think the success that we've seen and the obvious value to 24-hour market that we've seen-- and since we last spoke, we've rolled it out to more symbols. We're now at over 200 symbols after adding another 100 last week. We're seeing liquidity improve. We're seeing more customers engaging with it, particularly the active traders, more interest online.
And so these things actually help get the counterparties more excited. And as more brokers try to add this capability to customers, I think then it will become the activation energy to getting clearing over the weekends to happen, becomes a little bit more palatable.
BRIAN SOZZI: Fascinating time for markets. We have gold at a record high. We have crypto breaking through 40,000. Equity markets are at highs, too. Have retail investors participate in this rally?
VLAD TENEV: I think you are starting to see retail investors wake up to certain segments of the rally. I think crypto activity, you're seeing kind of a groundswell. What tends to happen is we've seen in the past, as the price of Bitcoin approaches all time highs, the media coverage and intensity increases. And I think that plays a role as well. If people are just hearing more about crypto around them, they tend to become more interested. And you start to see that reflected in trading activity, at least in the past.
And what we have to do is make sure we continue to improve our product and service. Over the past few years, we've made a ton of improvements in reliability and stability. And we believe now that we're in a position to handle all sorts of rallies. Whatever market events can happen, we're much stronger equipped to handle them.
JULIE HYMAN: That was Robinhood CEO Vlad Tenev with our Brian Sozzi.