A Big Bank Should Buy Robinhood Now

By Jim Bruene on March 16, 2015 3:00 PM | Comments
robin hood app.jpgFree stock-trading startup Robinhood has been getting a lot of press lately, and it appears to be well deserved. Founded in 2013, the company, has raised $16 million and is likely looking for more. Although many fintech startups have attracted 9-figure investments, none has as many celebrity investors. Rappers Snoop Dog and Nas are on board as is Academy Award winner Jared Leto. The company also boasts several tech celebs: Aaron Levie of Box, Dave Morin of Path and Finovate/FinDEVr alum, Howard Lindzon. 

But back to the premise. Look at the reported metrics (source: Institutional Investor, 13 Mar 2015, and VentureBeat, 12 Mar 2015):

  • 800,000 user waitlist (the platform just opened to the public 12 March) 
  • average age of 26.5
  • 90% are under 40 
  • 25% of users are first-time investors
  • 500,000 trades conducted
  • no minimum deposit, but company says smallest trading account is $400
  • website traffic: 970,000 in last 30 days (source: TrafficEstimate.com, 13 Mar 2015)
  • ranked #6 in U.S. Apple app store free finance section (source: Apple, 13 Mar 2015)
While that is impressive traction, the lack of revenue can't go on forever (they currently earn a few thousand dollars per month for order flow). The company says it will monitize with margin lending, premium services, and, surprisingly, given its traction with youth, institutional investor services. 

Given their anti-establishment positioning, the Robinhood team may not like this idea, but I think the company would make an excellent retail bank acquisition (if the price was no more than 10x the money raised, or $160 million). This assumes, perhaps naively, that said acquirer would leave the Robinhood brand alone. And if Robinhood is too pricey, then banks could emulate its strategy with other partners. Why get involved in free stock trading?

  • Millennial customer acquisition: I can't imagine a bank ever getting close to 1 million on its wait list. There just isn't a compelling reason. But free stock trading apparently has high perceived value. 
  • Checking tie-in: It won't be easy to cross-sell banking services. But by allowing free, real-time and super simple transfers from linked checking, you have a chance (especially if you charge a nominal fee for other bank transfers).
  • Little cannibalization: Since most banks don't generally have a large stock-trading business, free trading won't devastate an existing business like it would at Schwab or E*Trade. While dollars invested into stocks are dollars not sitting in a checking account, if the majority of trading customers are new, that's not a factor. 
  • An ironic brand: I'm pretty sure no major bank board is going to sign off, but I love the idea of a bank using the Robinhood brand to gain traction with young adults. The irony is perfect.
Partnering: Even if you can't buy the company, you may be able to partner with them. When signing up for an account, Robinhood already preloads online banking login details for eight major financial institutions (in the order shown below). There is also an option to link any checking account by inputing your account and routing numbers. 
  • Bank of America (see screenshots below)
  • Wells Fargo
  • Chase
  • Citibank
  • US Bank
  • USAA
  • Fidelity
  • Charles Schwab
A partner might be able to get their logo displayed exclusively (or at least first). 

Screenshots from Robinhood app (18 March 2015)
Login screens to link a Bank of America checking account to your RobinHood app



Don't Miss Out on the FinovateSpring Very Early-Bird Ticket Discount!

By Eric Mattson on March 4, 2015 7:19 PM | Comments

btn3_ov.pngHot on the heels on our largest FinovateEurope to date, we've begun to focus on our FinovateSpring event scheduled for May 12 & 13 in Silicon Valley.

Our team is hard at work sorting through the huge stack of applications from innovative fintech companies looking to showcase their latest and greatest in front of more than 1,300 attendees. Based on the initial analysis, it seems safe to say that this event is going to be one of our best! 

The audience is also shaping up to be one of our best ever and includes executives from leading organizations like the following:

  • American Express
  • BancVue
  • Bank of the West
  • Barclays PLC
  • BBVA Compass
  • Brown Brothers Harriman
  • C1 Bank
  • Capital One
  • Celent
  • Charles Schwab
  • Chase Paymentech
  • City National Bank
  • D.E. Shaw
  • Deluxe
  • Diebold
  • Experian
  • Federal Reserve System
  • Fidelity Institutional
  • First Republic Bank
  • FIS
  • Fiserv
  • FNB
  • Forbes
  • H&R Block
  • Harland Clarke
  • Intellectual Ventures
  • Intuit
  • Jack Henry
  • Javelin Strategy
  • JP Morgan
  • Justice FCU
  • Lending Club
  • LendingTree
  • Mastercard
  • Maybank
  • MACU
  • Nasdaq
  • New York Life
  • Pando Daily
  • PNC Bank
  • Primerica
  • PSCU
  • Quicken Loans
  • Route 66 Ventures
  • S&P Capital IQ
  • Silvergate Bank
  • Stanford FCU
  • State Farm
  • TCV
  • TD Ameritrade
  • TSYS
  • Umpqua Bank
  • USAA
  • UW Credit Union
  • Visa
  • Wells Fargo
  • WePay
  • Western Union
  • Yodlee
  • And many more!

So, while it will be a few more days until we announce the presenter lineup, NOW is the time to lock in the affordable Very Early-Bird Ticket price. Buy your ticket before this Friday, March 6, 2015, and you'll save $200 on your chance to watch the future of fintech unfold live on stage!

We'll see you in Silicon Valley in May (or New York this fall)!

FinovateSpring 2015 is sponsored by: The Bancorp, CapitalSource, Envestnet, Financial Technology Partners, Hudson Cook LLP, Kyriba and Life.SREDA.

FinovateSpring 2015 is partners with: Aite, Bank Innovators Council, BankersHub, BayPay, Bobsguide, BreakingBanks, California Bankers Association, Canada, Celent, eBankingNews, Fin-tech.org, Filene Research Institute, Hotwire PR, Javelin Strategy, Mercator Advisory GroupWestern Independent Bankers and SME Finance Forum


Transaction Alerts Need to Get Smarter

By Jim Bruene on February 18, 2015 4:52 PM | Comments
fraud word cloud.jpgMy inbox is far from normal. With 25 active financial accounts, all set to maximum notifications, I am drowning in email alerts, push notifications and other helpful communications. But who isn't overloaded with missives from social media, news feeds, spambots and whatever else is competing for your attention.

Banks need to help users cut down on the noise, by offering smart alerts that don't bog you down in trivial details. Not to pick on anyone in particular, because all my providers do pretty much the same thing (with the notable exception of BillGuard), but this alert from Bank of America today (see below) is a good example of info overload. 

Yes, I'm sure I asked the bank to notify me of any card-not-present transactions. Given the amount of times my card number has been breached in the past five years, it's a good early warning. But really, do you think it's necessary to tell me for the 89th consecutive month that you paid my $8.75 Netflix monthly fee? Really, I just want to be informed if it suddenly increased or showed up twice in the same month. 

BofA would probably want my permission to stop sending me this monthly alert. So how about a little button that says, "Don't tell me about this charge if it's the same next month," or something along those lines. And this should also be an option in the bank's alert dashboard (e.g., "Don't alert me to repetitive monthly fees, unless they change"). 

Thanks for listening. 


Bank of America email alert (18 Feb 2015)



Source: Fraud artwork above from NCUA's MyCreditUnion 


Tuesday Tactics: Creating a Winning Confirmation Page

By Jim Bruene on February 17, 2015 11:12 AM | Comments
pelican_laptop.jpgOver the years, I've rarely been impressed with the confirmation pages displayed after a user takes an action, especially completing an online loan or product application. Today, I came across a good example of a post-sale confirmation screen from RedBubble (see screenshot below), an online purveyor of smartphone cases, laptop skins, and so on (see inset). 

Notice the things they do right:

1. Thank you for the order 
2. Mockup of the receipt with big "PAID" stamp across it
3. Specific details on what happens next
4. Social sharing tool (may not be applicable to financial institutions, use at your own risk)
5. Links to key help areas (changing the order, determining shipping date)
6. Email address for Help (with order number clearly visible)

Other items a bank should consider:

1. Toll-free contact number
2. More personalization; for example, "Thanks Pat" 
3. Detailed information on expected turnaround time for the application to be processed
4. Have a real person say the "thanks"
5. Navigation option back to an appropriate area on your website
6. Upsell messages
7. Security assurances
8. Privacy policies



Tuesday Tactics: Capital One Uses Calendar Integration in Email Promotion

By Jim Bruene on February 2, 2015 4:30 PM | Comments

imageEditor's Note: This post was drafted three days before Thanksgiving (24 Nov 2014), but inadvertently never published. But the technique cited can be used any time of the year. So without further ado:


Capital One 360 continues the tradition of Black Friday banking promotions used by its predecessor ING Direct (previous posts). The direct bank unit of Capital One sent its first promotional tease three days before Thanksgiving (Monday afternoon, 24 Nov 2014). It simply said to watch the site for specials beginning after midnight (Eastern Time) on Thanksgiving night.

The bank has been using a similar direct-marketing technique for years. But this year, I noticed one small improvement. The bank makes it easy for readers to load a reminder to their calendar with a single click (supports Gmail, Outlook, Yahoo, iCal).

Bottom line: Calendar integration is a nice touch and something that financial marketers could use whenever there is an upcoming deadline such as sweepstakes, offers, seminars, webinars. It could also be used to help customers remember payment or application deadlines.


Capital One 360 Black Friday countdown page (link, 24 Nov 2014)


Black Friday email teaser (24 Nov 2014, 1:30 PM Pacific Time)



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