Robinhood to provide 24/7 support to users

Who is Robinhood?

Robinhood is a fintech brokerage company that offers commission-free trading, providing an online platform enabling customers to trade stocks, exchange-traded funds (ETFs – a type of security that tracks a particular index/commodity/sector which can be purchased and traded in the same way as a conventional stock) and options. The business also offers users the ability to invest in certain cryptocurrencies based on geographical location, and additionally, their income is primarily generated from payment for order flow (the money earned by brokerage companies when they direct orders to other parties to execute trading).

Why have they been in the news?

On Tuesday 5th October the firm announced its release of 24/7 customer phone support in an attempt to strengthen their customer service quality and increase ‘reliability, accessibility and understanding of financial markets for their consumers. Whilst beforehand, users had limited access to phone support for technical issues at specific times of the day and had to rely on tedious email chains to resolve issues, they can now request within the app to call a support agent for guidance.

The 24/7 support is still a first for the industry, and additionally, these plans follow from the firm’s announcement last month that it would provide crypto wallets to customers, enabling them to transfer crypto holdings from their platform, thus further breaking down the barriers to become a trader as an average consumer; they can analyse their risks better leading them to make better, more informed decisions. These new services moreover improve their competitiveness with rival companies such as Coinbase, and also generally helps with recovering their damaged reputation from the meme stock trading surge which happened earlier this year when they had to restrict the trading of stocks like GameStop and had to increase emergency funding to prevent falling behind demand from investors.

However, there are still concerns about such a system. Firstly, many stakeholders are worried about the lag time between the call request and the call itself; when the market is undergoing extreme volatility (i.e when it is very unstable), it will almost inevitably prove difficult to respond quickly to the several millions of customers requesting calls out of panic. To maintain the call services and cope with large demand, Robinhood has seemingly already started hiring various contractors. Of course, this will come at a massively high cost which will have to be offset by a large, increasing customer base.

What do you think about Robinhood and their new services? Do you think they’re doing enough to rebuild their previously damaged reputation? If you’re not already using Robinhood, do you think you’d consider using them?

-James Gordon, University of Warwick

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