E*Trade Financial Services

Abstract

The electronic age continues to grow and to offer new and more efficient forms of electronic trade and electronic commerce.  As this evolution continues, it is no surprise that the online financial services industry is seeing both significant changes and new revenue potential.  One of the players in the online financial services industry is E*Trade Financial Services. Launched in 1992, the company was a pioneer in online brokerage services.  At its inception, E*Trade’s focus was on becoming America’s dominant deep-discount brokerage firm by fully automating the front and back-office trade processing function and maintaining its position as the low-cost provider.  Today, E*Trade offers a diverse and integrated portfolio of services including deep-discount brokerage services, traditional banking services like checking and savings, and mortgage and equity services.  E*Trade strives to provide a range of services that are consolidated under one website, to provide convenience, and to be accessible 24/7.  E*Trade also provides the tools necessary to guide clients through their financial needs.  E*Trade faces growing competition as the industry is facing self-destructive price-war and, thus to reduce the costs, undergoing huge consolidations. While the competition is tough, E*Trade has a strong presence and percentage of marketshare in the industry.  The company has proven that it can attract customers and provide the information and tools that they require to manage their own portfolio.  The self-directed investors and the individuals who want control of and access to their finances are the core customers of E*Trade, and the company caters to them in terms of products and services.  Where will E*Trade go from here?  Should the company continue to slash the fee and commission charges like others do, or should it diversify its services and focus on core revenue generator of brokerage services?  These questions are addressed in this paper as well as the current market position and the types of services that are offered.  The paper provides a snapshot of what E*Trade is, what it does, and where it is going.