Robinhood automated deposits up 100% QoQ

Investing
platform


Robinhood

added
more
than
$3.4
billion
through
its
automated
customer
account
transfer
service
in
the
first
quarter,
up
100%
quarter
over
quarter. 

The
company
is
seeing
high
deposit
volume
“supported
by
a
young
customer
base
gaining
share
of
global
wealth,”
and
expects
to
meet
its
multi
year
20%
deposit
growth
rate
target,
Chief
Financial
Officer


Jason


Warnick

said
during
the
company’s
earnings
call
May
8.

The
Menlo
Park,
Calif.-based
company
reported
net
deposits
of
$11
billion
for
Q1,
more
than
double
last
year’s
quarterly
average,
he
said. 

Robinhood
has
gained
deposits
from
existing
and
new
customers
along
with
winning
customers
from
incumbent
financial
institutions,
Warnick
said. 

Deposits
were
“75%
contributions
from
customers
and
25%
net
wins
from
incumbents,”
Warnick
said,
adding
that
the
company
had
$5
billion
in
net
deposits
in
April. 

Deploying
tech
for
deposits

According
to
a
May
2023
report
by


NASDAQ,

more
than
half
of
Gen
Z
Americans
hold
investments
of
some
kind
due
to
ease
of
investing
and
simplified
access
to
financial
information. 

Major
financial
institutions
including



U.S.
Bank,
TD
Wealth

and


Envestnet

have
deployed
automated
investing
solutions
to
entice
customers
to
keep
their
accounts
at
traditional
FIs
rather
than
moving
to
fintech
platforms.

 

U.S.
Bank
is
giving
customers
$100
to
open
an
Automated
Investor
account,
according
to
the
bank’s
website.

 

TD
Wealth
launched
its
automated
investing
solution,
Robo-Advisor,
in
October
2021. 

Banks
are
seeing
outflows
from
customer
accounts
to
investment
fintechs
like
Robinhood
as
more
people
jump
into
the
equities
market
for
better
returns,


Dani


Fava,
told

BAN
when
see
was
working
as
the
group
president
for
product
innovation
at
wealth
tech
company
Envestnet.
She
left
the
position
last
month.

“Deposits
are
hard
to
come
by
this
year
[and
automated
investing
offerings
are]
a
method
to
drive
engagement
and
a
method
to
retain
deposits”
Fava
said.
“This
is
a
method
for
the
banks
to
keep
money
in
their
ecosystem
and
to
drive
engagement.” 

Robinhood
expanding
offerings

Robinhood
is
expanding
its
product
offerings
and
has
gained
traction
with
the
launch
of
its

Robinhood
Gold
credit
card
in
March,
which
has
more
than
1
million
applicants
on
the
waitlist,
according
to
the
company’s
earnings
report. 

Nearly
half
of
banking
customers
are
seeking
a
one-stop-shop
experience
for
their
financial
needs,
and
Robinhood’s
“introduction
of
credit
cards
aligns
quite
well
with
this
demand,
especially
having
launched
checking,
high-yield
savings
and
retirement
accounts
recently,”


Sean
O’Brien,
principal
consultant
of
wealth
management
practice
at
consultancy
firm


Capco,
told


BAN. 

.