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| Investing the wireless way |
July 9, 2002 |
By Grace Casselman
This service is part of Bell Globemedia Interactive’s GlobeinvestorGold.com package. For $9.95 a month, the Webbased service sends real-time quotes, market data and news and analysis to desktop computers, and pumps personalized alerts to computers, cellphones and wireless devices. Users can opt to receive wireless alerts on stock prices, trading volumes, dividends, changes in analysts’ recommendations or news items. By the end of April the service, which was launched in December, had sent out 1.2 million alerts.
Because of the small screen on his phone, Takeda, who manages his family farm, hasn’t bothered to receive news alerts via his cellphone; he just tracks his stocks. “For what I’m after, the information I receive via the alerts is enough.”
In any case, GlobeinvestorGold.com only transmits the first 64 characters of articles sent out to wireless devices. Users have to sit down at a desktop to get the rest.
Slow adoption
The information-only offering is not linked to any trading services, although David Keith, senior vice-president of Bell Globemedia Interactive, said future directions could include partnerships with stock-trading firms to allow the wireless technology to provide direct links to their services.
“But it is still only a small percentage of investors, maybe five or 10 per cent that feel the need to track changes in their stocks “instantaneously,” Keith said.
Many Canadian banks and investment houses are now offering wireless services to their customers, including various alert options and even trading. However, the adoption rate just hasn’t matched previous expectations, according to industry players.
“The take-up rate for wireless content hasn’t been anywhere near what people were anticipating a few years ago,” said Steve Kruspe, chief information officer at Charles Schwab Canada, a member of the Scotiabank Group whose wireless service was launched in 1999. “All the industry pundits were saying it would be the next big thing.”
While 70 per cent of Schwab’s self-directed business comes via the Internet, less than one per cent of that is done wirelessly, Kruspe said, adding that only very active or sophisticated traders require the immediacy of wireless services.
“The issue with wireless is that it’s clunky. On the cellphone screens, you see just 10 to 20 characters, three or four lines deep.
Reading a news story on wireless Internet is painful,” Kruspe said.
However, wireless data services might get a boost from new devices that offer voice capability along with a larger screen, like Research in Motion’s BlackBerry 5810 Wireless Handheld, the Handspring Treo or the Compaq iPAQ.
But even if wireless investing is relatively underutilized, banks can’t afford to ignore it because it’s seen as part of a healthy competitive offering. “You’re damned if you do and damned if you don’t,” Kruspe said. That’s because “customers are looking for completeness of channels, including wireless, even if they aren’t using it much.”
Other trading channels include live representatives at call centres, interactive voice response (IVR) or a Web site.
“Everybody was in front of [the wireless curve] and it never materialized,” Kruspe said. Looking ahead, he anticipates that financial institutions will wait for user demand to push future wireless offerings.
“Now we’ll let demand lead. It’s a wait-and-see game.”
Marnie Kinsley, executive vice-president of e-business for the Bank of Montreal, based in Toronto, agrees. “Adoption has not been as fast as we expected. Everyone thought this would be exponential, but it hasn’t been.”
The BMO Wireless service was launched in 1999, she said, and now supports more than 40 models of cellphones and wireless devices, allowing users to buy, sell or short-sell stocks.They can set up portfolios and view past transactions, see market indices, and create and receive alerts.
Kinsley said most wireless investors will track stocks with their cellphone, but will often use a more traditional method to place a trade “because there’s a lot of keying involved. The convenience is in the information [on a mobile device] rather than the transaction.
“We forget many of the people using wireless are big Internet users,” she continued.That means they’ve developed expectations about dealing with a rich supply of data based on their Web experiences, and they want to see that on their mobile devices.
No one was willing to share actual figures on the adoption rate of their wireless investment services. However David Sypher, senior vice-president, direct channels,TD Waterhouse Investor Services (Canada), based in Toronto, is more bullish about wireless. “We’ve had steady growth in the usage of wireless,” he said of TD Waterhouse Wireless, launched in November 1999. “It’s meeting our projections.”
But Sypher sees wireless as a service primarily for investors, rather than a solution for professional stockbrokers.
“[Professionals are] hard-pressed to get enough information away from their desktops.”
Market drivers coming
Mark Quigley, research director for The Yankee Group in Ottawa, points to the recent standardization among major Canadian carriers around SMS (short message service) as one potential booster for this market. Basically, SMS allows users of different phones and carriers to exchange text messages.
“This is driving people to the realization that the wireless handset is for something other than voice.”And as text messaging on cellphones continues to grow, it will advance all sorts of data services, he said.
While the much-anticipated 3G (thirdgeneration) networks won’t arrive in Canada until 2003 or 2004, analysts said a number of carriers are already rolling out mid-step 2.5G services, which could give a boost to wireless data offerings.
Meanwhile, carriers need to work on their pricing models for wireless data, said Warren Chaisatien, an analyst at IDC Canada in Toronto.
“Pricing is very high; this is not yet a commoditized market.”
Moreover, he said financial organizations, along with the carriers, need to work hard to reassure users about the security of wireless services.
Charles Barnett, an independent consultant in financial services automation in Chicago, Ill., said small screens on cellphones have contributed to the slow adoption of data services. “If the Internet was displayed in that kind of window, there wouldn’t have been a market explosion.”
And voice quality will continue to be important for wireless devices. “It has to be a good phone,” said Barnett, who admits he previously had a phone that was “a great Web browser, but a horrible phone. I couldn’t hear on it or talk on it.”
He uses the Harris Wireless service (the Harris Bank in Chicago is a member of the Bank of Montreal Group of Companies) to monitor his holdings, place trades, receive alerts, see a real-time evaluation of his portfolio, check quotes and get the latest investment news.
That’s all done regularly from the back of a cab, he said.
Barnett receives alerts every day, and no wonder: one of the criteria he’s set is for the service to notify him “whenever Microsoft changes a penny.”
Barnett said he finds it a hassle to have to boot up his computer just to check a stock value or make a trade. “There are things I find easier to do on the phone than on the Web.
When I’m not working, I don’t want to be near the PC.”
Web investing
Bank of Montreal http://www.bmo.com
Charles Schwab Canada http://www.schwabcanada.com
GlobeinvestorGold http://www.globeinvestorgold.com
Harris Bank http://www.harrisbank.com
IDC Canada http://www.idc.ca
TD Investor Services http://www.tdwaterhouse.ca
Yankee Group http://www.yankeegroup.com
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