Robinhood (HOOD) announced Tuesday it will expand its customer phone support to operate 24 hours a day, seven days a week. The move signals the newly public company's efforts toward enhancing customer access for account support and financial education as it expands into crypto assets.
The company, which has 31 million users as of June, said it wants to increase “reliability, accessibility and understanding of our service and financial markets.” Shares were trading more than 3% higher midday, at around $42.40.
While users have asked Robinhood for 24/7 support for years, this new offering shows more priority being given to its rapidly growing segment of customers trading cryptocurrencies. It follows Robinhood's September announcement that it would roll out crypto wallets, allowing customers to send and receive their crypto holdings off their platform.
“There is a large emotional barrier for new investors entering the crypto industry as crypto has traditionally been an experience made by engineers for engineers,” Christine Brown, Robinhood Crypto COO, told Yahoo Finance. “We hope providing 24/7 phone support will break down this barrier as our customers are now able to ask questions along their crypto journey.”
A Robinhood spokesperson also said Robinhood is on pace to more than double its support staff from 2020. According to a blog post in June, Robinhood has 2,700 employees working in customer service.
'Help traders understand the risks'
Alvan Chow, a 27-year-old who trades stocks and derivatives on Robinhood – including Reddit-favored GameStop (GME) – said the new phone support feature is a move in the right direction.
“Robinhood, with all its pains as a startup, has made wonderful strides in democratizing finance, evident by the mass of brokerage firms now adopting zero-commission trading,” said Chow. “The addition of 24/7 phone support will help traders understand the risks they are taking in the market with greater clarity.”
While he isn’t sure yet how much he'll use the service, Chow said, “having the optionality feels good.” However, he does suspect the company will need to make clear the "difference between customer support and financial advice."
“If floods of calls come in during market volatility, that would be a difficult situation to navigate on both ends (Robinhood and customer)," said Chow.
Security for HOOD
While 24/7 phone support could have many uses, security is one measure often missed. Roman Sannikov, head of cyberthreat Intelligence at the blockchain analytics company TRM Labs said it's more likely a “psychological measure.”
“The idea is that if you find something [suspicious] in the middle of the night, you know something was deducted from your account, you can immediately reach someone who could provide you with some sort of mitigation, and can potentially stop a transfer before it goes through,” said Sannikov, who spent time working in security for both traditional financial companies and cryptocurrency businesses.
The sentiment recalls the criticism Robinhood faced since June 2020 when Alex Kearns, a Robinhood customer, took his own life after he mistakenly believed he had lost $750,000 trading derivatives on the platform. At that time, Robinhood didn't have customer phone support but Kearns did contact its email support several times throughout the night of June 11 and the morning of June 12 after receiving automated emails notifying him that his trading would be restricted and that he needed to repay the company hundreds of thousands of dollars.
While email support is available to customers who can’t get into their accounts, this new phone support option is only available to customers with account access. That means Robinhood customers who can't get access to their accounts cannot yet contact the newly extended phone service. The company said it plans to release that additional support soon.
“We’re working on a solution for logged-out customers to get phone support in the coming months,” Brown confirmed.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.