Page 101 - Introduction to Electronic Commerce and Social Commerce

80 3 Retailing in Electronic Commerce: Products and Services

Figure 3.2 Online electronic
stock trading

telephone lines, and the chance to err is small, because there SECTION 3.5 REVIEW QUESTIONS
is no oral communication in a frequently noisy environment.
Orders can be placed from anywhere, at any time, and there is
no biased broker to push a sale. Furthermore, investors can 1. List the major online real estate applications.
2. What are the advantages of selling insurance online?
find a considerable amount of free research information about
specific companies or mutual funds. Many services provided 3. What are the advantages of online stock trading?
to online traders include online statements, tax-related calcu-
lations, extensive research on industries, real-time news, and
even tutoring on how to trade (e.g., check etrade.com or 3.6 ONLINE BANKING AND PERSONAL
google.com/finance). FINANCE
How does online trading work? Let us say an investor has
an account with Charles Schwab. The investor accesses Electronic (online) banking (e-banking) refers to conduct-
Schwab’s website (schwab.com), enters an account number ing banking activities online. Consumers can use e-banking
and password, and clicks on “stock trading.” Using a menu, to check their accounts, pay bills online, secure a loan, trans-
the investor enters the details of the order (buy, sell, margin fer money, and much more. Sixty-one percent of U.S. adult
or cash, price limit, or market order). The computer tells the Internet users bank and pay bills online (pewinternet.org/
investor the current (real-time) “ask” and “bid” prices, just as files/old-media/Files/Reports/2013/PIP_OnlineBanking.
a broker would do over the telephone, and the investor can pdf). Several sites have tools that can help you with personal
approve or reject the transaction. The flow chart of this pro- finance and budgeting. Examples are mint.com, geezeo.
cess is shown in Figure 3.2. com, and kiplinger.com.
Some companies, including Schwab, are now also licensed
as exchanges. This allows them to match the selling and buy-
ing orders of their own customers for many securities in one E-Banking
to two seconds. Some well-known companies that offer online
trading are E*TRADE, TD Ameritrade, Scottrade, and Share E-banking saves users time and money. For banks, it offers a
Builder. rapid and inexpensive strategy to acquire out-of-the-area
With the rapid pace of adoption of mobile computing, customers. In addition, the banks may need fewer branches
mobile stock trading is becoming more and more popular (e.g., or employees. Many physical banks now offer online bank-
see the mobile offering from E*TRADE). For example, users ing services, and some use EC as a major competitive
can pay bills and purchase stocks (see details in Chapter 11). strategy.