New Deutsche Bank online broker aims for 1.5m customers by 2004.
Deutsche Bank has already begun marketing Maxblue in Germany and Spain and will extend its drive to Italy, France and other major European markets later this year. The company can expect stiff competition across Europe from domestic rivals Consors, Comdirect and Direkt Anlage Bank as well as US powerhouses E*Trade and Charles Schwab and similar discount brokerage services from Merrill Lynch and CSFB. So are Deutsche’s aims realistic?
The market for online brokerage in Europe is expected to continue growing, driven by the increasing penetration of the Internet and the realization among Europeans that national governments can no longer afford to provide retirement support.
However, the disappointing profits of the current crop of online brokers shows that customer numbers on their own are not enough. The level of trading per customer is crucial to the bottom line. Many of the best target customers have already been scooped up, but companies are now turning their attention to the ‘second generation’ of retail customers. Typically these customers are more risk averse than their predecessors, preferring the safety of pooled funds and advice driven services and this is where Maxblue has an advantage. Maxblue can draw on the wealth of expertise and experience of its parent to offer a value-added service.
On top of this, Deutsche are not ruling out the possibility of partnerships with other online brokers. This may prove to be a quick way of gaining access to customers, and for potential partners, Deutsche has plenty to offer. If, however, the competition is not willing to give up its first mover advantage, we may see a straightforward fight in the industry. If this happens the spoils will go to those with the deepest pockets and as we all know Deutsche has very deep pockets. The future then looks bright for Maxblue – not as bright as it would have done two years ago, but bright nonetheless.
