Charles Schwab (NYSE:SCHW) has unveiled a new application for iPad users that will allow customers to complete transactions remotely.  Clients will be able to deposit funds into their Schwab brokerage and Schwab Bank accounts by merely taking a photo of the front and endorsed back of a check via the camera integrated into their iPads.
Schwab also extended trading hours for mobile applications, allowing clients to place orders for eligible ETFs and stocks during even pre-market and after hours trading sessions using their smartphones. The announcement is a part of the technological developments that the company is undertaking in order to compete in a dampened market with fellow online brokerage firms like E*TRADE Financial (NASDAQ:ETFC) and Ameritrade (NYSE:AMTD).
Our price estimate for Schwab is $14, in line with the current market price.
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Schwab is hoping that the increased flexibility and convenience offered by the announcements will help lift trade volumes which have been depressed the last few months. The company reported 285,200 Daily Average Revenue Trades (DARTs) in the second quarter of 2012, a decline of 10% from the first quarter. DARTs were flat between June and July as a negative trend was observed throughout the industry. Although Schwab is yet to reveal metrics for August, Ameritrade’s numbers might provide an indication of the client activity for the month. Ameritrade reported 303,000 client trades per day in August, down 9% from the previous month, a year-on-year decline of 37%.
With the state of the U.S. economy and growing concerns over the national debt, we expect DARTs to remain low for the next few months. The result of the general elections in November might lead to some optimism and have a positive impact on investor confidence. We expect trade volumes to recover in the long-term as the global economy comes out of its shell.
You can gauge the impact of a change in forecasts, by modifying the charts above.Notes:
- Charles Schwab Launches Brokerage and Schwab Bank Mobile Deposit for iPad® , Press Release, 11th September, 2012 [↩]