I remember a certain fee that still upsets me from my days of credit card and bank account churning where I’d sign up for new accounts, perform the necessary actions to receive the bonus, and keep the account open long enough to validate the bonus. 


Bank Of America, which I have no issue telling you to stay away from, gave me $100 to open an account with them. Once I did that, I removed the money from the account and went about my business. Now, they have the gall to charge people for not having enough money in their account. In my case that was $0. So, seeing this, the next month they slapped my account with a $25 fee for a failure to meet the minimum account balance requirement. Then, seeing that I now had a -$25 balance, they then hit me with a negative account balance fee of $35. 


Because I no no intention of using this account after I had gotten the bonus, I didn’t log in for several months. 


Imagine my surprise when I logged in to close the account only to find that it was over a hundred dollars overdrawn. 


Now, this wasn’t the end of the world for me, but I can imagine someone with different circumstances would have a very different opinion. Today’s banking institutions make a large portion of their revenue from fees like these, and I think that’s extremely malevolent given that people are entrusting them with their money to begin with. 


Not to mention, globally 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services.


Banks will refuse to service “high risk” individuals who then have to turn to even more unscrupulous businesses like check cashing services which take money out of people’s paychecks. 


So, clearly, the banking industry is letting people down. But, how does this involve Robinhood? 


For one, I think the checking and savings accounts will be a loss leader. After all, Robinhood’s core business is commission-free investing in stocks, options, bonds, ETFs, and most recently cryptocurrencies. 


Because customers will have to open a brokerage account with them to get access to the cash management accounts, I think there’s a connection being built here. 


Robinhood’s vision, it seems, is to be a turnkey solution for all consumer investment and cash management needs. 

Speaking more broadly, the idea of separate banking and brokerage accounts will someday seem archaic. 


Instead, we’ll see a day where one account is used for everything.


We’ll have one account for our investments, our assets, and our cash, allowing us to buy, sell, and hold assets on a whim. 


Essentially, instead of being beholden to banks that clearly are overcharging and under delivering, we’ll see a customer-first banking and investment approach. 


The conversation will change from, “how can we make more money from our customers?”, to, “how can we help meet our customer expectations and help them succeed?”


Banking as it exists today is extremely susceptible to disruption. 


We will either see banks ready to embrace more efficient, cheaper, and more enjoyable experiences, or we will replace them. 


The bigger they are, the harder they fall.