1. Analysis of The Brokerage Industry and Electronic Trade

1-1. The Characteristics of the on-line brokerage business

Advancement in technology has fundamentally changed the way corporations and consumers conduct business in the stock market. And Electronic Commerce seems to be one of the early beneficiaries of the development of Internet. Capitalizing on real-time, and low cost structure of doing business. Early entrants in this business segment are expected to be the ones to successfully establish leadership positions across many vertical markets and establish franchise domination over time, especially if their business model seem to recognize early changes in the industry. Such was the case for Intel Corporation in the microprocessor industry. And the trading business seem to display a similar potential in the Internet service industry.

A major portion of the cost of the brokerage business could be reduced (up to 75% for discount brokers and up to 90% for a traditional broker). This is achieved by processing up to 80% of all transactions electronically, without human intervention in a traditionally labor intensive industry. In addition low cost e-mail and on-line account information could further cut cost, from a more expensive customer support and print advertising. The resulting cost structure is as follows:

Once the technology platform for an electronic brokerage service is built, other vertical markets could be expanded upon such as financial, payroll, back office administration, travel & entertainment, electronic funds transfer, and insurance and health claims administration.