The news: The UK neobank giant secured a US broker license to capitalize on the retail trading boom that has made the likes of Robinhood household names, per CNBC.
How we got here: Revolut launched its banking services in the US in March 2020 through a partnership with Metropolitan Commercial Bank and then added crypto trading in July that year. It already offers stock trading in the UK, where it provides one commission-free trade a month for standard users before charging fees.
How will it fare? Revolut faces tough competition from well-established digital brokers—and retail trading may already have peaked.
Digital brokers in the US added more than 20 million new accounts since the start of the pandemic, so while Revolut has over 300,000 customers in the US that will have instant access to its stock trading service, many of them likely already use another digital broker and have little reason to switch:
And the mass user windfall over the past year has abated.
Bottom line: Revolut is at a different stage of maturity in trading compared with digital brokers. While it’s looking to scoop up its first US trading customers, Robinhood and its ilk are launching more advanced trading features for their already massive user bases. This stark difference creates a tough journey for Revolut to catch up.
Want more? For a deeper dive into how stock trading fits in with Revolut’s strategy to build a stickier ecosystem, read this article from our Banking Briefing.