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" <ikea_promo@ikea-webkit.com>
To:lisamarie@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
How Security Empowered
eSchwab to Become the
#1 Internet Broker
Ginni Chadha and Lisa Laguna
MIS 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 Process
Customer 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
No Problem!!!
Trade
transacted.
e-Transformed Trade Process
Customer wants
to make a trade.
Customer
walks into or
calls Schwab
Trade
transacted.
But what if you’re in the
middle of nowhere???
m-Transformed Trade Process
Customer wants
to make a trade.
Customer
walks into or
calls Schwab
Voila!!!
Trade
transacted.
Trading Anywhere
Trading Anytime
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
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 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
Internet Security Model
incorporates SSL
Browser requests
secure
conversation w/
server
Browser uses
public key to
encrypt shared
secret key
Server
provides
certificate
Browser sends
encrypted share
secret key to
server
Browser
authenticates
Shared secret
key encrypts rest
of conversation
WAP Security Model
incorporates WTLS
Wireless
Device
Wireless
Network
Internet
WAP
Gateway Network
Content
Server
WTLS enables super secure transactions without
requiring the power-and memory-hungry security
solutions used on the Web.
Evolving Security Issues
 Viruses
 Hackers…ask Bill Gates
 Continued investment in IT
Developing Security Technologies
epad
chip2chip
Biometrics
Smart cards
Digital signatures
Summary
 Schwab’s evolving business model
 How the e-business is dependent upon state-
of-the-art security measures
 Future issues and evolving security
technologies
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)