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There had been a high level of interest in the bank's service, which allows customers to buy and sells shares over the Internet without having to open a separate trading account, David Roberts, AIB's senior manager of e-business communications told ElectricNews.Net. He declined to reveal how many people had actually signed up to the service, but said AIB was happy with the response to it, given its launch date and the current lull in the stock markets.
Roberts added that those using the service have traded at least once since its launch with the average trade size being IEP2,000. He said he expected activity to increase once the markets begin to move in an upward direction.
AIB is also due to receive some competition in this space shortly with the launch of a similar service from Bank of Ireland. ElectricNews.Net has learned that although Bank of Ireland has set no launch date, it is expected the bank will offer customers an Internet share dealing service in conjunction with its stockbroking arm Davy's within the next four to six weeks.
Such moves by Ireland's two largest banks would seem to buck the trend within the on-line share dealing market. Several companies in the sector such as E-Trade and Charles Schwab have recently cut staff and restructured as the interest in trading over the Internet has diminished in line with the downturn in the market. Additionally, Motley Fool announced this week that it planed to lay off 75 of its 187 staff, the third time the company cut jobs this year.
One of the advantages that AIB has over competitors in the space is its ability to work from the bank's customer base, many of whom already bank on-line. Furthermore the company was able to build its service from existing infrastructure, allowing it to keep costs down.
Another unique feature of the AIB service is that trades are settled immediately with funds paid into or debited from the customer's account. It is also "execution" only which means no advice is offered on whether shares should be bought or sold. In addition, shareholdings are held in electronic form on behalf of the customer rather than in "paper" certificate form. The service was developed in conjunction with Goodbody Stockbrokers, a fully owned subsidiary of AIB.
It is these unique features that Roberts said will attract users. "It allows people to buy and sell stocks while sitting at their PCs and without having to try and get through to their stockbroker," he commented.
At the peak of the dotcom frenzy many people became "day traders," trading stocks and shares over the Internet in the hope of making a killing. Several analysts believe that the success of many on-line brokerages was due in no small part to the activities of day traders.
However, it now appears that the day of the day trader may be over. According to a recent study, trading volume in the on-line brokerage sector fell by 12 percent in the second quarter from the previous quarter. Charles Schwab, meanwhile, said that its customers are now trading only half as much as they were at the start of the year.
AIB's on-line share dealing service can be found at http://www.aib.ie/sharedealing/index.html.
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