Wall Street Firms Going Mobile in 2011
Why It's Important: There are 235 million mobile subscribers in the United States -- 49 million of whom have smartphones, according to Celent. And one out of every three U.S. smartphone owners uses mobile banking. Applications for the BlackBerry and Apple's iPhone are mushrooming. Apple's third-party applications store now offers more than 200,000 "apps" for the device. And earlier this year, the launch of the iPad, with its larger screen, triggered a new wave of excitement in the mobile space.
Where the Industry Is Now: Wall Street is starting to jump on the mobile bandwagon. Brokerages with smartphone applications include Fidelity; TD Ameritrade, whose app provides research, account information, and stock and options trading; and E-Trade, whose app enables clients to check watch lists and portfolios, trade, and watch live CNBC broadcasts. TradeKing's BlackBerry app allows traders to monitor quotes and place, edit and cancel orders. Morgan Stanley offers a research app to institutional investors, and Dreyfus has an iPad app for its sales team.
Despite this flurry of app activity, however, adoption on Wall Street still is in the early stages. "In terms of the variety of tradable products, mobile devices still lag behind websites," says Corporate Insight CEO Mike Ellison. "[Mobile trading] is generally limited to stocks and options, rather than funds. They still have some catching up to do."
Corporate Insight reports that only 11 of the 21 brokerages that it monitors currently offer a mobile-formatted site or downloadable application. "One of the reasons they're slow to come out with mobile applications is because of adviser relationships -- they look at the adviser as the main point of contact for their business," Ellison explains.
Security challenges also are holding back some companies, and, given strict regulatory requirements, firms also are concerned by the lack of an audit trail. "The biggest concern is having sensitive customer data about a deal, for example, on those types of devices," says Joe Nocera, partner, PricewaterhouseCoopers.
A growing number of employees use their personal -- unsecured -- iPhones to do business, Nocera notes. As a result, some of the bigger firms have taken the risk off the table by giving employees company-owned iPhones so that if a device is lost, the IT department can immediately wipe it clean, he explains. "There are more solutions looking to remotely wipe the device or encrypt a portion of the data on the device -- or do both," Nocera says.
Focus in 2011: TradeKing director of product development Mike Massey says brokerages will shift more content to mobile devices. "We view it as access," he comments. "Right now it's about giving them the tools to consume information on their mobile devices. In the future, we'll see more content -- such as social media, news and video -- being pushed out on mobile devices."
Firms will pay close attention to security when they choose a mobile platform, seeking stronger levels of authentication controls, adds PwC's Nocera. "And they will focus on the need to protect the data on the device," he says.
Industry Leaders: Morgan Stanley recently became the first Wall Street institution to allow its equities and economics research to be uploaded to Apple's suite of mobile products and Google's Android platform. TD Ameritrade is one of the only other firms on the Street to have developed an app specifically for the Android operating system. (The iPhone/iTouch are the most popular devices for brokerage apps, according to Corporate Insight.)
Technology Providers: Pyxis says it provides mobile platforms to 28 of the top global asset managers and three of the top five U.S. banks. Other providers of mobile services for the capital markets include Sybase, Lab49 and Scivantage.
Price Tag: Investment in mobile platforms varies by scope. At the lower end of the investment spectrum, Pyxis Mobile's hosted/SaaS platform, which the vendor says enables customers to design screens to their specifications without custom coding and to run mobile solutions natively across BlackBerry, iPhone, Android and Windows Phone devices, costs $55,000 a year.
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio
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