National Discount Broker Site Compromised

1
National Discount Broker Site Compromised

• National Discount Brokers site, which has
  200,000 customers, was down for more than an hour
  Thursday as company engineers tried to fend off
  what appeared to be an attack
• The FBI is still investigating the other
  attacks, which took down Yahoo!, eBay and
  ETRADE, among others.

2
Ikeas Contact DB Compromised

• From"IKEA" ltikea_promo_at_ikea-webkit.comgt 
• Tolisamarie_at_psu.edu
• Dear Lisa,
• As promised, we want to provide you with an
  update on our rigorous site security
  investigation. We worked with an expert third
  party Internet security firm to ensure that our
  system supports the most advanced Internet
  security protection that is essential in keeping
  up with today's ever-changing Internet climate.
  We are happy to announce that IKEA's online
  catalog requestor and Space Magazine requestor
  are back up on our web site. Online visitors to
  the catalog request areas should feel confident
  that their information is protected. Rest assured
  that no credit card or financial information was
  ever at risk. Additionally, access to your email
  account was not at risk. You will still receive
  the IKEA catalog as you requested.
• Sincerely,
• IKEA Customer Service

3
How Security Empowered eSchwab to Become the 1
Internet Broker

• Ginni Chadha and Lisa Laguna
• MIS 597C
• November 27, 2000

4
Charles Schwab Services

• Retail brokerage
• Mutual funds
• Support services for independent investment
  managers
• Equity securities market making
• Research services
• Professional advising services

5
Traditional Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
But what if its 3am???
6
e-Transformed Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
No Problem!!!
7
e-Transformed Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
But what if youre in the middle of nowhere???
8
m-Transformed Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
Voila!!!
9
Trading Anywhere
10
Trading Anytime
11
Obvious Benefit to Consumer, but What is Value
Added for Schwab?

• Increased customer base
• Customer relationship development
• Knowledge acquisition
• Increased profits
• Cross selling/increased service offerings
• Increased brand awareness

12
MarketPlace Value Chain
13
MarketSpace Value Chain
14
Industry Sources Say

• 1 Internet Broker, 1 Serious Investor, 1 In
  Ease of Use, 1 in Relationship Services, Fall
  2000, Gomez.
• 1 Full Service Broker and 1 Discount and Online
  Broker, Sep 2000, Worth Magazine
• 1 in Investment Research, 1 in Portfolio
  Tracking, 1 in Banking Services, March 2000,
  TheStreet.com.

15
SWOT Analysis of eSchwab
Strengths First to e-market Multi-channel strategy Large alliance network Strong security initiatives Strong brand One-stop shopping Weakness Weak international presence (esp. in wireless)
Opportunities Knowledge value creation Global expansion Wireless market has great potential Threats Competitors catching up netGen may prefer cheaper trades Evolving security threats
16
Internet Security Modelincorporates SSL
Browser requests secure conversation w/ server
Server provides certificate
Browser authenticates
Browser uses public key to encrypt shared secret
key
Browser sends encrypted share secret key to server
Shared secret key encrypts rest of conversation
17
WAP Security Modelincorporates WTLS
Wireless Network
Internet Network
Content Server
Wireless Device
WAP Gateway
WTLS enables super secure transactions without
requiring the power-and memory-hungry security
solutions used on the Web.
18
Evolving Security Issues

• Viruses
• Hackersask Bill Gates
• Continued investment in IT

19
Developing Security Technologies
epad
chip2chip
Biometrics
Smart cards
Digital signatures
20
Summary

• Schwabs evolving business model
• How the e-business is dependent upon
  state-of-the-art security measures
• Future issues and evolving security technologies

21
(No Transcript)
22
2000 Statistics Schwab

• 39 revenue growth from 98-99
• 69 profit growth from 98-99!!!
• 4.1 m online accounts
• 81 trades online (compared w/ 36 in 97)
• 80 transaction cost savings per trade
• 21 online market share
• (down from 50 in 97)