Commonwealth Securities (CommSec), the Commonwealth Bank's broking subsidiary, is the latest Australian company to cash in on the marketing benefits of SMS and e-mail, and yesterday launched a personalised information service based on these technologies.
Available to the 670,000 members of CommSec, the service can send SMS and e-mail alerts with information on stock prices, notify users when stocks hit a specific pre-set price, and update information at certain times of the day.
The service, which can be used on any mobile handset and via any carrier, costs 22 cents per SMS message and 11 cents per e-mail and works on a credit point system. The user buys 100 credit points from CommSec for $22; each SMS alert sent will cost one credit point, and each e-mail will cost half a credit point. The service only provides information of Australian stocks.
"SMS is the fastest growing technology today. Growth rates are comparable to that of the Internet," said Mike Katz, head of institutional banking at Commonwealth Bank. "We are the only people offering this sort of coverage and this will differentiate us from our competitors for a long time but we have no doubt that we will be copied."
While the new service is aimed primarily at corporate customers, who are sending as many SMSs as the youth market, Katz says it will appeal to anyone who has a continuing interest in the stock market.
This latest move follows a previous attempt at using mobile technology to capture users. Katz says CommSec spent a lot of time and money on developing a WAP system, only to have WAP fall by the wayside.
"Business is about risk, and innovation is what drives business and makes you successful. This is a risk and who knows, in a year from now we may look back and say what a stupid idea it was," Katz says.
But CommSec is supported by research provided by Telstra and Optus saying the SMS market is growing at a rapid rate and doesn't look to slow down any time soon. Doug Reid, business solutions manager at Telstra, says there has been 100 per cent growth in SMS in the last 12 months.
"Wireless technology such as SMS is the future in the telecommunications industry and it is imperative for telecommunications companies to provide mobile technologies," Reid says. "There are 250 billion SMSs sent a year worldwide. [In Australia] in 1999 there were 10 million SMSs sent; as of August 2001 there were 80 million SMSs sent [per year]."
Both Telstra and Optus have partnered with CommSec on developing the back-end technology, such as billing. While CommSec will charge its users 22 cents per SMS, it won't reveal how much Telstra and Optus are charging for the service, but conceded it was receiving a cheaper price.
CommSec is the largest online discount broker in Australia with 668,900 clients, and averages between 5000 and 10,000 trades a day.