The business model to be adopted in this country will have to be different, given the fact that both PC penetration and stock ownership is at much lower levels. But brokers, already wilting under the impact of competition, will find the heat increasing. No brokerage in the country can afford to ignore online trading, if it wants to survive. For the larger firms, the threat will come from other financial service providers such as banks, financial information portals on the Net, and even software companies which want to provide online tradingas a service.

After all, if e-mail can become a commodity, so too can online trading. Brokers, therefore, have no alternative but to invest heavily in information technology not merely to get online, but also to keep their sites updated.

The cost of a broking card, hitherto a very important factor in the total costs of a brokerage, will become progressively lower when compared to the investment required in IT. The way forward for established brokerages is therefore to provide value-added services. Personalised, one-stop, in-depth services are absolutely essential for survival on the Web. Since the competition is only a click away, marketing and product differentiation strategies must be oriented towards reinforcing the brand image.

A recent study has thrown some doubt about the dire threats of the Net ushering in perfect competition-the evidence to date seems to be that customers will continue to flock to the sites they know, just as they go to the shops they are familiar with in the physical world.This tendency will be supported by the customer's need to trust his broker and to have confidence in his advisory capabilities.

Providing the appropriate level of transaction security is, therefore, a must. Established brokerages already have a vast network of agents, who act as the company's interface with the investing public. The brokerage will be best advised to build volumes through providing support and research to these agents, rather than look merely to well-informed individuals trading on their own account. The bottomline is brokerages need to be armed with a strategy to face the challenging times ahead.