eTrade 2000 Annual Report Download - page 50

Morgan Stanley Dean Witter;
National Discount Brokers;
Net.B@nk, Inc.;
PaineWebber Incorporated;
Salomon Smith Barney, Inc. (which is owned by Citigroup);
TD Waterhouse Securities, Inc.;
Wells Fargo & Company;
WingspanBank.com;
Yahoo! Inc.
Many of our competitors have longer operating histories and significantly greater financial, technical, marketing and other resources
than we do. In addition, many of our competitors offer a wider range of services and financial products than we do, and thus may be
able to respond more quickly to new or changing opportunities, technologies and customer requirements. Many of our competitors also
have greater name recognition and larger customer bases that could be leveraged, thereby gaining market share from us. Such
competitors may conduct more extensive promotional activities and offer better terms and lower prices to customers than we do,
possibly even sparking a price war in the online financial services industry. Moreover, certain competitors have established
cooperative relationships among themselves or with third parties to enhance their services and products. It is possible that new
competitors or alliances among existing competitors may significantly reduce our market share.
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General financial success within the financial services industry over the past several years has strengthened existing competitors. We
believe that such success will continue to attract new competitors, such as software development companies, insurance companies and
others, as such companies expand their product lines. Commercial banks and other financial institutions have become more
competitive with our brokerage operations by offering their customers certain corporate and individual financial services traditionally
provided by securities firms. The current trend toward consolidation in the commercial banking industry could further increase
competition in all aspects of our business. Commercial banks generally are expanding their securities and financial services activities.
While we cannot predict the type and extent of competitive services that commercial banks and other financial institutions ultimately
may offer, we may be adversely affected by s uch competition. To the extent our competitors are able to attract and retain customers,
our business or ability to grow could be adversely affected.
There can be no assurance that we will be able to compete effectively with current or future competitors or that such competition will
not have a material adverse effect on our business, financial condition and operating results.
Our computer security could be breached, which could significantly damage our reputation and deter customers from using
our securities trading, investing and banking services
Because we rely heavily on electronic communications and secure transaction processing in our securities, banking and ATM
businesses, we must protect our computer systems and network from physical break-ins, security breaches and other disruptions caused
by unauthorized access. The open nature of the Internet makes protecting against these threats more difficult. Unauthorized access to
our computers could jeopardize the security of information stored in and transmitted through our computer systems and network,
which could adversely affect our ability to retain or attract customers, damage our reputation and subject us to litigation. We have in
the past, and could in the future, be subject to denial of service, vandalism and other attacks on our systems by Internet hackers. In
addition, we must guard against damage by persons with authorized access to our computer systems. Although we intend to continue to
implement security technology and establish oper ational procedures to prevent break-ins, damage and failures, these security
measures may be unable to prevent future attacks from disrupting operations. Our insurance coverage may be insufficient to cover
losses that may result from such events.
Our business could suffer if we cannot protect the confidentiality of customer information transmitted over public networks
2002. EDGAR Online, Inc.