Enter the 21st Century now and compete with City pros in a multimedia kiosk

Electronic wizardry means share-dealing has never been easier, says Paul Gosling
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The Independent Online
The Stock Exchange enters the 21st Century next month, when it implements the Crest electronic share trading and settlement system. But punters need not wait until then to trade electronically, with several of the large brokers already offering facilities to trade by home PC or via a multimedia kiosk.

Three brokers, City Deal, ShareLink and Stocktrade, have signed up with Infotrade to offer execution-only share trading. Infotrade, a division of Mitsubishi Corporation, is a business information supplier which sees its future as the computer doorkeeper to a range of personal finance services, including banking and insurance, and also share trading backed up by comprehensive information on company performance that it claims is almost as good as that available to analysts.

Users can obtain immediate information on current prices, as well as a two-year price history, two-year result forecasts, and three-year histories of results, for all quoted companies. The service will gradually expand to cover other big stock exchanges, and provide more historic information. The Infotrade package will also automatically update share portfolio records held on home PCs.

For the regular investor the cost is modest, at pounds 25 to join and pounds 10 a month, and software purchase at pounds 70. Users need a modern IBM-compatible PC, with Windows software, fast modem and CD-ROM drive.

Peter Horne, chief executive of Infotrade, says: "This is the first move Mitsubishi Electric is making into the on-line services industry. A substantial investment is being made into this business with a target of 100,000 private investors in the next four years."

Some brokers see PCs as central to their attempts to expand their client base. Stephen Pinner, managing director of City Deal, explains: "We don't expect it to be a big seller straight away, but as PCs become more common it will be more useful, with other services also being traded over the PC hook." Mr Pinner says back-up facilities are as important as the trading itself.

"Infotrade does allow you to review your portfolio, and you can do your own research. You could ask it, for example, to list every company that pays out over 20p in the pound dividends. I would not now recommend any other software."

Emma Kane, head of investors' services at ShareLink, is also persuaded of the benefits of electronic share trading, including Infotrade. "It is never going to replace phone share dealing, but it is the way of the future," she says. "The problem has been of accessing timely share information. You will now get the same information as the analysts, at a fraction of the cost. It is a service that is going to rapidly increase in use."

But ShareLink is not solely committed to Infotrade, having also signed up with Electronic Share Information for share trading through the Internet. Ms Kane sees this as being a different product, for a different market, costing just pounds 5 a month. The ESI service provides share prices, up-to- date FT-SE indexes and trends as well as on-line trading for listed shares. Many competitors believe the Internet still has too many security problems to be acceptable for trading, though ShareLink and ESI say these have been solved through the latest encryption technology developed by the military.

Other forms of electronic share trading are also being developed by leading brokers. Lloyds Bank is examining a range of technologies and systems, and may offer its own service next year. A Barclays Bank spokeswoman says: "Barclays Stockbrokers are on the Internet, but it is not secure enough for a dealing service. We are interested in PC home share dealing, but value for money share dealing by phone is what we have concentrated on. We are keen to widen accessibility."

Barclays believes that multimedia kiosks developed by Olivetti, which use video-conferencing technology, could be key in developing new distribution channels. Since January the "Barclayzone" has been on trial in three large branches, allowing customers to talk face to face with brokers based in the head office in Glasgow. The service gives confirmation of price within four minutes, and can provide advice as well as execution.

If Barclays' service proves successful it will be introduced into airports and major train stations, as well as all larger branches of the bank. The bank sees the biggest potential in areas, such as the City of London, where there is a high proportion of professional customers.

Nationwide has already installed its own multimedia kiosks in 10 locations, including rail stations, Chesterfield hospital and six branches in Southampton. Unlike Barclays, though, the share dealing is execution only, carried out in partnership with ShareLink.

But the leader in the field until now has been NatWest. Using touch screens in 280 bank branches, the service has been used by 3 million customers, particularly for the big privatisation issues. The system has had to be updated to work with Crest, but will continue for the foreseeable future.

Eventually, though, NatWest believes that many of our financial transactions will take place using interactive television in the lounge. It is already conducting two trials in East Anglia, one in association with BT and the other in partnership with a cable company, that could lead to it being available sooner rather than later for home shopping, home banking and home share dealing.

Infotrade Portfolio can be purchased through any BT shop, or through BT telesales on 0800 226600.

ESI can be contacted on 01223 566926. Its Internet home page address is: http://www.esi.co.uk

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