E-Trade CEO Karl Roessner discussed the importance of customer satisfaction to the financial services company’s brand and provided his thoughts on cryptocurrency and artificial intelligence at an April 10 event at Georgetown’s McDonough School of Business, presented by the Center for Financial Markets and Policy’s Global Finance Speaker Series and the school’s Stanton Distinguished Leaders Series. The conversation was moderated by John Jacobs, executive director of the Center for Financial Markets and Policy.
Maintaining E-Trade’s brand was a key theme of the event. Roessner said that his goal was to return E-Trade to its core of being “disruptive and irreverent,” the go-to resource for traders. For Roessner, a self-proclaimed “control freak” who was appointed CEO in 2016, this meant growing as a leader by surrounding himself with talented advisors and learning to trust their advice.
A key part of how E-Trade stands out from competitors is how the company backs up its “digital first” approach with a human touch.
“We wrap the digital experience in world-class service,” Roessner said.
Part of that approach involves maintaining 30 local branches. It’s a relatively small number, as Roessner pointed out, but they are strategically located to ensure that there is a representative nearby for customers who want one. Roessner said that especially during volatile times in the market, people appreciate being able to meet face to face with a representative. The emphasis on the human touch has paid off in terms of E-Trade’s name recognition and trust among its customers.
“Our brand resonates more with people than any other out there,” Roessner said.
In a similar vein, Roessner argued for the continued importance of active asset managers and the importance of education in investing, including in the proliferation of ETFs . For customers, being educated as to why they are investing, what themes they value in investing, and what their risk tolerance is are crucial to choosing the right portfolio.
Customer service also means being able to appeal to a wide range of ages, and educating customers on the benefits and drawbacks of their available options. Roessner said that, for instance, many young customers had issues using E-Trade’s robo-investing tool. Young people tended to make accounts to perform only a few trades, and then stopped using it. Some did not realize that the robo-investing tool is designed for long-term plans, and money put into it may be hard to withdraw at short notice.
Even artificial intelligence, Roessner said, should best be understood in terms of how it can improve customer service. He said that by using AI to take care of rote accounting tasks, more personnel could be freed up to provide better customer service.
Roessner was less enthusiastic about the future role of cryptocurrency and blockchain in the investment world, calling it “a fantastic solution looking for the right problem to solve.” Although E-Trade began offering investment in bitcoin futures, he said, most customers did not invest. He added that until government regulators begin monitoring the asset class, it will likely remain too volatile.
He was similarly skeptical of the IPO market, noting that many recent IPOs, including Lyft’s recent opening, were for companies that had not yet begun to generate profit.
“Think before you get in,” he advised.
Asked what his biggest concerns were, Roessner circled back to E-Trade’s customer-first approach, saying that customer security was his highest priority. He said companies need to think about doing everything possible to protect their customers’ information, and be prepared to be forthright if there is a breach to preserve their brand’s integrity.