Individual investors have gotten a taste of the power of online investing, and they want more...much more.
Speaking at the SIA Technology Management Conference's opening general session, Steven Elterich, president of Fidelity eBusiness, could not stress enough that online financial services need to offer individual investors complete and total account aggregation. Elterich pointed out that aggregation goes far beyond just collecting market data from various sources, but will come to mean aggregating accounts from within a large enterprise and then from outside the enterprise.
Firms have dealt with aggregating market data, news and information, and they have embarked upon aggregating client information that resides in the organization's various business units. Beyond that, financial services companies will have to reach outside the organization, bringing in client account data that resides at other companies. The key is to provide the customer with a one-stop-shopping experience.
"This is gut-wrenching for many companies," Elterich said referring to the idea that firms will have to partner sometimes with quasi-competitors. "You need to partner. We have 30 content partnerships and we see that doubling over the next year."
Account aggregation leads to numerous other issues. First off, the company needs to contend with the strain on speed that an increasing amount of content will place on its Web site. The company must also more closely scrutinize the manner in which their e-company is set up: is each individual business unit responsible for their own initiatives, or does the company charge one group with overseeing a coordinated development?
Firms must also focus on the adoption of increasingly complex online tools. "Tools are very important to the user's experience," Elterich explained. "You need to give them full financial planning, the ability to do good portfolio management."
As a sign of the times, Joe Ricketts, chairman of Ameritrade Holding Corp, who also spoke in the opening session, pointed to OnMoney.com, which portends to give investors just those tools, automating a good portion of the investing process. Ricketts says that OnMoney will eventually link to any number of brokers - not just Ameritrade. Users will set pre-defined investment parameters, such as sell a certain number of shares of stock XYZ when it hits $80. When that limit is reached, OnMoney will link to the broker and transact without the intervention of the individual.
Separately, both Ricketts and Elterich declared that 24-hour trading days are inevitable. "Today we do about 500/600 trades a day in the after-hours, and we expect that to continue to grow," Ricketts said. "You can't disassociate London from New York...As the rest of the world gravitates together, markets will just get bigger and bigger."