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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 E*TRADE, among others.”
Ikea’s Contact DB Compromised
From:"IKEA" <[email protected]> To:[email protected] 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
How Security Empowered eSchwab to Become the
#1 Internet Broker
Ginni Chadha and Lisa LagunaMIS 597C
November 27, 2000
Charles Schwab Services
Retail brokerage
Mutual funds
Support services for independent investment managers
Equity securities market making
Research services
Professional advising services
Traditional Trade ProcessCustomer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
But what if it’s 3am???
e-Transformed Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
No Problem!!!
e-Transformed Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
But what if you’re in themiddle of nowhere???
m-Transformed Trade Process
Customer wants to make a trade.
Customer walks into or calls Schwab
Trade transacted.
Voila!!!
Trading Anywhere
Trading Anytime
Obvious Benefit to Consumer, but What is Value Added for Schwab?
Increased customer baseCustomer relationship developmentKnowledge acquisitionIncreased profitsCross selling/increased service offeringsIncreased brand awareness
MarketPlace Value Chain
MarketSpace Value Chain
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.
SWOT Analysis of eSchwabStrengths
First to e-marketMulti-channel strategyLarge alliance networkStrong security initiativesStrong brandOne-stop shopping
WeaknessWeak international
presence (esp. in wireless)
OpportunitiesKnowledge value creationGlobal expansionWireless market has
great potential
ThreatsCompetitors catching upnetGen may prefer
cheaper tradesEvolving security threats
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
WAP Security Modelincorporates WTLS
Wireless Device
Wireless Network
WAP Gateway
Internet Network
Content Server
WTLS enables super secure transactions without requiring the power-and memory-hungry security solutions used on the Web.
Evolving Security Issues
VirusesHackers…ask Bill GatesContinued investment in IT
Developing Security Technologies
Digital signatures
epad chip2chip
Smart cards
Biometrics
Summary
Schwab’s evolving business modelHow the e-business is dependent upon state-of-the-art security measuresFuture issues and evolving security technologies
2000 Statistics Schwab
39% revenue growth from 98-9969% profit growth from 98-99!!!4.1 m online accounts81% trades online (compared w/ 36% in 97)80% transaction cost savings per trade21% online market share
(down from 50% in 97)
