Tuffty said:
Seems this is a growing trend. i.e. put your own branding on a current spread betting provider. I guess they have some profit share agreement. I notice iii have done the same.
It's a pity really as I thought it would bring more competition to the spread bet markets.
On the face of it, it looks like the SB niche is going in the same direction as credit cards in that the main system administrators are MAster card and Visa. Credit card facilities used to be offered solely by retail banking organisations. Other organisations then got on the bandwagon to the extent that you can obtain a credit card branded by any man and his dog (I believe the RSPCA do a card too!)
Given that the costs of setting up a SB infrastructure from scratch (IT systems, Systems maintenance bods, customer service etc etc are high) and, subsequently, time to market is also longer than using the infrastructure of an existing providor. Additionally, SB systems set up and ongoing management is almost undoubtedly viewed by e-trade's management team as being non-core. As a consequence, they wil have asked themselves:
1) How can we get a slice of this rapidly growing SB market (of which we're not yet a part)?
2) How can we extract more profit from our existing customer base?
3) How can we bring an SB product to market asap at lowest strt up cost and risk to ourselves?
So the answer lies in what they have done.
The net result of all this is that there is increased competition in the SB services providor market. However, new providors are using the IT systems of existing providors, thereby providing them (existing providors) with an additional revenue stream, and as a result no (or limited) new customer user interfaces (with innovative whistles and bells) are coming onto the market. So, unfortunately, we've just got to accept that that's the way things stand right now!
