Robinhood's AI and crypto push: the future of finance?

Robinhood has unveiled three new financial products aimed at younger investors that integrate artificial intelligence (AI) to enhance existing wealth management and private banking services. These new offerings, revealed on a livestream titled 'The Lost City of Gold' and named 'Robinhood Strategies', 'Robinhood Cortex', and 'Robinhood Private Banking', are exclusive to Robinhood Gold members, a premium tier that has grown to over 3.2 million users in 2024.

Robinhood’s New Offerings

Robinhood Strategies is claiming to offer AI-powered investment advice with real-time insights. Robinhood Cortex is an AI research assistant, leveraging the current trend of AI agents doing things for customers, like delivering market data and trading recommendations. Robinhood Private Banking is trying to bring a more premium tier of services to users with savings accounts with concierge-style ancillary financial services.

The company aims to position itself as a major player in the Great Wealth Transfer, estimated at over USD$100 trillion.

The Bigger Picture: AI and Automation in Finance

Robinhood’s latest move reflects a broader industry trend where AI-driven financial tools and automated bots are used as trading and advice tools. AI now plays an increasing role in market research, predictive analytics, and risk assessment. Trading algorithms, powered by machine learning, execute trades with speed and precision that us mere meatbags simply cannot match.

AI-driven platforms can analyse vast datasets in real-time, identifying market patterns and making recommendations based on historical trends and predictive modelling. This shift promises to make investment research and financial planning more accessible to lower-income brackets (and younger people in general).

The Role of Tokenisation and Smart Contracts

Beyond AI, tokenisation, a key component of Robinhood’s vision - enables the conversion of real-world assets, such as equities and private investments, into blockchain-based tokens. While there has been plenty of primary issuance of tokenised assets, actual trading of these products has been slow to evolve as regulators and regulated markets have not yet settled on standards. Fractional ownership, faster and cheaper borrowing against assets, increased liquidity, and broader accessibility to financial markets are the promise.

Meanwhile, banking services, from lending to wealth management, can be transformed through decentralised and programmable smart contracts. These contracts automate transactions, enforce agreements without intermediaries, and enable secure, transparent financial operations.

Institutions around the world are experimenting with tokenised securities and blockchain-based settlements, aiming to reduce inefficiencies in traditional markets. As more financial assets move onto blockchain rails, we may see greater adoption of decentralised finance (DeFi) services, bridging the gap between traditional banking and digital asset ecosystems.

Conclusion The integration of AI, automation, and blockchain promises to redefine financial services, breaking down barriers to wealth creation and financial management. This integration will open up new legal questions in relation to liability of AI driven advice or trading and market integrity considerations.

While regulatory challenges remain, these innovations are expected to drive significant industry growth over the coming years. Robinhood’s recent developments are just one example of how financial platforms are embracing the future. As AI and blockchain technology continue to evolve, the next decade will likely see even greater accessibility in finance - bringing sophisticated investment tools to a wider audience. By Steven Pettigrove, Luke Higgins and Michael Bacina