Case Study

E-trade Financial Services

To:

Mr Muhammad Saeed
Liaqat sb
By:

Hafiz Muhammad Sikandar

(7455)
(Group leader)
Group members:

• Hafiz Muhammad Usman (7489)

• Shabaaz Hussain Chishti
(7479)
• Tahir Raza
(7483)
• Aqsa Neem
(7480)
• Benish Iqbal
(7485)
Case Study

Department of Public
Administration

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E-trade Financial Services

E-trade financial services are pioneer in online brokerage services, launched in 1992. It focused
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.

E-trade offers deep discount brokerage services, traditional banking services, and mortgage
and equity services. Its services are available on one website and accessible 24/7. E-trade
adopted direct-to-customer strategy instead of private label.

Trade plus, the parent company of E-trade, was founded by Bill porter in 1982 as a PC financial
management services bureau. In 1992 porter launched E-trade securities Inc. found a partner in
General Atlantic partners, why made a significant equity investment in E-trade in 1995. In
adulation the company filed with SEC in may 1996 for an initial public offering.

E-trade offered a variety options for retirement includes traditional IRAs, Roth IRAs and IRA
accounts for self employed as well as for education saving. The information about the all these
option or offers are easily accessible 24/7 and free of cost. This thing creates a sense of caring
for customers and attracts the customers.

E-trade offers a number of tradional banking services but they are differ from tradional brick and
motor bank. E-trade provides three distinct checking accounts according to customer needs and
demands, (the complete the value and regular checking account).It provide smart saver savings
account is an FDIC insured savings accounts offering premium rates like a CO but without the
term requirements and the ability to add to the principal at any time. it also provide two distinct
money market accounts. The E-trade money market plus account is an FDIC insured accounts
that offer super premium yields for customers who maintain high balance along with unlimited
access and the flexibility to write up to three free checks per month.

The platinum visa card offers variable rate with no annual fees and the functions of standard
card for balance transfer and cash advances.

E-trade also offers low rate loans for the purchase of new or used RVs and boats or refinancing
for existing loans on these vehicles. It also provide mortgage loans.

All of the E-trade services offer convenient and easy to understand tools on the website and all
of they are free to cost which attract a larger no. of customers e.g. ( loan calculator, IRA help &
tips & past stock history etc)

Over 2500 companies use E-trade for the management of stock plans for 1.3 million employees
in more than 100 countries.

According to chief communication officer E-trade has “very flat” management structure in which
about 3500 employees are working. He also says that the company has four different levels of
titles including professionals, business managers, business leaders and officers.

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After its initial public offering in 1996, when E-trade experienced enormous growth, it choose to
employ.

Oracle enterprise resource planning applications to manage its financial and human resource
functions which allows E-trade to use a lean staff to run all the modules and they provide real
time application and infrastructure performance analysis.

E-trade guarantees that it will execute trades in two in two seconds, the industry average is 5
seconds. For this purpose it upgrade its server and change its operating system. It use
LINUM(server) for reducing software licensing fees and service costs and use IBM system to
develop a horizontally scaled system that can adapt to worked changes and failures. E-trade
use proactive net software to provide real time application, SLA and infrastructure performance
analysis. Proactive net monitor all the servers in its production environment for the company’s
North American Trading and Banking website in order to assure continued and successful
business.

E-trade has 15000 ATMs machine in the United States and 600,000 ATMs worldwide. An
advantage to ATM cards that customers are not changed a fee when ever using an out of
network machines.

E-trade did no achievements in 2004 due to trade slumps. It try to buy its rival companies (TD
water house & ameritrade but all in vain. Ameritrade owner said that this company is not for sale
and he bought TD water house for 3 billion. Ameritrade chosen to buy TD over E-trade because
TD has ten times more no. of branches then the later with 2600 registered investments advisors
in the US.

E-trade after failed “negotiation to merge” with TD & Ameritrade, bought the discount brokage
division Harris direct bank of Montreal financial group for $750 millions. It also bought browen
Co. for $ 1.6 billion, the brokerage division of IPMorgan chase & CO.

E-trade bought Howard capital management and later kobren insight management. By doing
this its average trading volume per day increased to 1, 60,000.

E-trade has established itself as one of the most visited banking and investing sites on the
internet. The E-trade online brokerage is ranked fourth while fidelity first, TD ameritrade second
and Charles Schwab & co. thired. E-trade bank is in the top 100 largest deposit taking institution
in the US with $ 14.6 billion deposits in banking accounts. Through the acquisition, expansion
and retention customer relationships. E-trade has achieved a consolidated net income $ 301.1
million or $0.79 per dilute share for the nine months ended September 30, 2005, compared with
net income of $ 209.7 million or $0.75 per dilute share for the same period in 2004.

E-trade is certainly passable as an on-line brokerage. It is to be average in its services. E-trade

pros as education, easy website nanigation and a large library of contents. It received an
average rating of three out of five stars for customer services, website experience and website
load time. It has a strong record in the online financial services field and will continue to
strengthen that position through expansion services and grow opportunities. The company will
continue to be a presence in the industry and holds the potential to become a global power

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house with the diversification of services and the careful management of the firm, it may
become the online leader in several of its offered services with acquisition and strategic mergers
simultaneously expanding into the bricks and mortar financial industry. E-trade can continue to
increase its market share and strengthen its position as a diverse financial services provider in
both the virtual and real worlds.

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