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First step: all of a customer's info in one place
"I've been a huge proponent of this convergence of financial services," says Eric Roach, founder of Lombard Brokerage, an early on-line discounter. But Roach's convergence is no small potatoes: "In ten years;' he says, "what my firm does and what a full-service firm does will be essentially the same."
To make that happen, Roach wants to use technology to reinvent the idea of one-stop shopping for consumer financial services. He got a headstart when Dean Witter, Discover & Co. anted up $70 million last year to buy Lombard, now called Discover Brokerage Direct.
Roach envisions a single financial hub, called Discover Direct, offering a full range of products from Dean Witter Discover and eventually, even from merger partner Morgan Stanley: banking services, brokerage, credit cards, mortgages and other loans, insurance, 401(k) plans, mutual funds, bill payment and bill presentment, all on-line, in addition to an electronic wallet and smart card.
There are three major planks to Discover Brokerage's plan: wholehearted adoption of Open Financial Exchange (OFX); an aggressive advertising and marketing campaign; and a rewardsbased system that will let investors earn credits for each transaction.
"People's biggest financial issue is not...