eTrade 2012 Annual Report Download - page 8

TECHNOLOGY
We believe our focus on being a technological leader in the financial services industry enhances our
competitive position. This focus allows us to deploy a secure, scalable technology and back office platform that
promotes innovative product development and delivery. We continued to invest in these critical platforms in
2012, helping to drive significant efficiencies as well as enhancing our service and operational support
capabilities. Our technology platform also enabled us to deliver trading and investing functionality with the
introduction of E*TRADE 360, enhanced mobile offerings across new devices and upgrades to our trading
platforms.
COMPETITION
The online financial services market continues to evolve rapidly and we expect it to remain highly
competitive. Our trading and investing segment competes with full commission brokerage firms, discount
brokerage firms, online brokerage firms, Internet banks, traditional “brick & mortar” retail banks and thrifts and
market making firms. Some of these competitors provide Internet trading and banking services, investment
advisor services, touchtone telephone and voice response banking services, electronic bill payment services and a
host of other financial products. Our balance sheet management segment competes with investment banking
firms and other users of market liquidity, in addition to the competitors above, in its quest for the least expensive
source of funding.
The financial services industry has become more concentrated as companies involved in a broad range of
financial services have been acquired, merged or have declared bankruptcy. We believe we can continue to
attract customers by appealing to retail investors by providing them with easy to use and innovative financial
products and services.
We also face competition in attracting and retaining qualified employees. Our ability to compete effectively
in financial services will depend upon our ability to attract new employees and retain and motivate our existing
employees while efficiently managing compensation related costs.
REGULATION
Our business is subject to regulation by U.S. federal and state regulatory and self-regulatory agencies and
securities exchanges and by various non-U.S. governmental agencies or regulatory or self-regulatory bodies,
securities exchanges and central banks, each of which has been charged with the protection of the financial
markets and the protection of the interests of those participating in those markets.
Our regulators, rulemaking agencies and primary securities exchanges in the U.S. include, among others, the
Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the
New York Stock Exchange (“NYSE”), the National Association of Securities Dealers Automated Quotations
(“NASDAQ”), the FDIC, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the
Municipal Securities Rulemaking Board, the Office of the Comptroller of the Currency (“OCC”) and the
Consumer Financial Protection Bureau (“CFPB”).
Both our brokerage and banking entities are subject to the Bank Secrecy Act, as amended by the USA
PATRIOT ACT of 2001 (“BSA/USA PATRIOT Act”), which requires financial institutions to develop anti-
money laundering (“AML”) programs to assist in the prevention and detection of money laundering. In order to
comply with the BSA/USA PATRIOT Act, we have an AML department that is responsible for developing and
implementing our enterprise-wide programs for compliance with the various anti-money laundering and counter-
terrorist financing laws and regulations. Our brokerage and banking entities are also subject to U.S. sanctions
laws administered by the Office of Foreign Assets Control and we have policies and procedures in place to
comply with these laws.
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