25 September 2017
visit www.avoka.com

Online brokerage set to boom says IDC

27 June 2000  |  3132 views  |  0 Online brokerage set to boom says IDC

Over $1 trillion of new US household assets will move online over the next four years triggering competition between online firms that will be as intense (and as expensive) as the competition for new accounts in 1998 and 1999. The forecast, published by research house IDC, says total online assets will approach $2.6 trillion in 2004.

High-income households (earning over $100,000) will continue to represent a significant growth opportunity for online brokers, as this segment contributes the majority of all online assets. By 2004, almost all high-income households will access the Internet, and more than half will utilise online brokerage services, says IDC. By 2004, high-income households will comprise 40% of all online accounts, but will represent two-thirds of online assets. Meanwhile, moderate to lower income households (below $50,000) will hold 5 million online accounts, and make up 24% of the market.

"This will introduce the opportunity for segmentation strategies in marketing, pricing, servicing, and even in site design and business models," says Shaw Lively, research manager with IDC's online financial services research group.

As the online investor population becomes more diverse, firms must find competitive differentiation by taking advantage of their strengths, beliefs, and view of online opportunities, says Lively.

IDC expects the online brokerage business model will evolve from a one-size-fits-all product to encompass at least four distinct business models: the "Supermarket" (including E*Trade and TD Waterhouse), the "Best of Breed" (Schwab, Ameritrade), "Traditional Brokers with Integrated Online Channels" (MSDW, Merrill Lynch), and the "Niche Players" (such as JP Morgan, which targets the affluent segment).

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

AB Watley ports trading platform from Microsoft to Sun

AB Watley ports trading platform from Microsoft to Sun

21 June 2000  |  3178 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.vasco.comvisit www.capgemini.comvisit www.temenos.com

Top topics

Most viewed Most shared
HSBC switches on selfie payments in ChinaHSBC switches on selfie payments in China
13764 views comments | 29 tweets | 44 linkedin
AXA launches blockchain to cover late flight compensationAXA launches blockchain to cover late flig...
10550 views comments | 14 tweets | 30 linkedin
SBI Ripple Asia advances on South KoreaSBI Ripple Asia advances on South Korea
8740 views comments | 16 tweets | 1 linkedin
Apple P2P payments service nears launchApple P2P payments service nears launch
8704 views comments | 19 tweets | 27 linkedin
ISO 20022: The common language of choiceISO 20022: The common language of choice
8458 views comments | 1 tweets | 2 linkedin

Featured job

circa £250K total package
London

Find your next job