By Lisa Burroughes, 17 February 1999 16:49
NEWS Online broker, Charles Schwab has reported a 65 per cent increase in its daily online trading figures compared to December last year. The company claims an average of $2.6bn of securities were traded online every day during January - bringing the total assets held in customer accounts to more than $521bn. In recent weeks online trading has been heavily criticised by industry and government bodies, including the US Security and Exchange Commission. Computer glitches in both the E*Trade and Charles Schwab systems have caused investors to lose thousands of dollars. The New York attorney general has now opened an investigation into these errors. But Michael Walton, CEO of Internet consultancy NVision, doesn't believe people will stop trading online. "Companies setting up online trading systems must plan their IT infrastructure so that it is scaleable enough to cope with peak trading loads. But if you compare the system to the traditional call centre model it is much more flexible," he said. Walton added an investor is "much more likely to get the service he needs from the Internet. An hour's outage could just as easily have been an hour trying to ring through to the call centre and getting the engaged tone". Competition in the UK online trading market is set to heat up with rivals E*Trade, Barclays Stockbroker and NatWest Stockbrokers all expected to launch services soon. Walton believes that although this will create a "competitive war" the number of online investors will never be able to match that of the US. "It isn't in the mentality of the average person in the UK in the same way as it is in the US to trade in stock shares," he concluded.
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