E*Trade plans to upgrade its platform to include a focus on blockchain technology and artificial intelligence, while the firm’s IT strategies shift away from legacy data centers. In addition, E*Trade plans to adopt more cloud-based, and container-based technologies. In an interview with the Wall Street Journal, E*Trade Financial Corp. Chief Information Officer, Lance Braunstein said, “there’s a lot of excitement” among employees over making the company a disruptor again.
The company is accelerating its software development, with a focus on automating mundane IT tasks and determining the benefits of various emerging technologies including AI and blockchain. Braunstein hopes to leverage the E*Trade brand and its existing assets to rejuvenate its disruptive roots.
This drive towards disruption comes as a company-issued mandate, issued by the board of directors and put in motion by CEO Karl Roessner. He is the seventh CEO to attempt to rejuvenate the company after its near collapse during the financial crisis. In the issuance of a mandate for disruptive technology, Roessner’s goal to clearly define the company’s future has been achieved. The next step is to execute on this goal, in order to prevent a potential sale of the company.
The E*Trade model of earning commissions from new traders is a dying industry, as competitors are now offering commission-free trading. In addition, cryptocurrency exchanges are offering an alternative with extremely low fees by comparison.
Braunstein’s team includes 1,300 employees whose current responsibilities include maintaining legacy data centers. As the company shifts towards more cloud-based solutions, they expect that IT staff would have more bandwidth for software and product development. Over the past year, the company has launched OptionsHouse, a new mobile app designed to provide advanced options traders with account management, research and analytics. This and future development will follow “agile” methodology, meaning that upgrades will be released iteratively rather than as major builds.
Under Braunstein’s guidance, an innovation group has been tasked with developing AI chatbots and other amenities for “less sophisticated” investors. Users would be able to ask the bot questions like, “Who’s announcing earnings today?”
In its exploration of blockchain technology, E*Trade is looking into improved methods for transactions, such as wire transfers carried out in near real-time by eliminating the need for an intermediary. That said, it may take some time for the company to warm up to blockchain, let alone crypto, but it’s certainly a possibility. Braunstein said, “For me right now it feels more like a solution waiting for tangible problems to emerge. We don’t have a dying need to use blockchain.”
According to Investor’s Business Daily (IBD), E-Trade Financial (ETFC) is a top stock to watch this week, in company with Square (SQ), PayPal (PYPL), TD Ameritrade (AMTD) and SVB Financial (SIVB). The publication suggests that the financial sector looks strong, with technical indicators showing potential buy patterns, according to the IBD analysis. The announcement of the company’s technical direction may have come at just the right time, when the positive sentiment from its growth strategy could factor into investor decisions regarding its stock.