Charles Schwab & Co. is making a charge at the overseas market, and Robert Duste is helping lead it.
The senior vice president has been with the company since 1984. Having played a key role in the discount brokerage leader's push to the forefront of the U.S. on-line investment market, Mr. Duste is looking to recreate some of that success as head of technology for what Schwab calls its international enterprise.
In 1996, Schwab's revenues rose 30%, to $1.9 billion, and earnings increased 35%, to $234 million. But revenues from outside the United States amounted to less than 5% of the total.
With one of its closest competitors, Merrill Lynch & Co., garnering nearly one-quarter of its revenues overseas, San Francisco-based Schwab saw an opportunity to expand on its successes.
Mr. Duste (pronounced "dust-AY") stands at the heart of this effort because many of the services Schwab plans to offer internationally are electronic.
He is overseeing the building of infrastructure that will let Schwab provide access to U.S. securities and mutual funds through the Internet and by telephone 24 hours a day, seven days a week.
"What we're concentrating on to really differentiate Schwab is our computing infrastructure," said Mr. Duste, 40.
The company is striving "to offer the highest availability and reliability in the world," he added.
These words pack some punch, given what Schwab has accomplished domestically.
With 908,000 on-line accounts holding $66.6 billion of assets, Schwab is the largest on-line broker.
Its Internet site gets nearly five million hits a day, and the electronic channel brings in an average of about 10,000 new accounts a week.
On-line trading has quadrupled in the last two years and now constitutes 36% of all trades the company handles, up from 23% a year ago.
Schwab's Internet site went live in July 1996 and can accommodate 10,000 users at once.
One key to getting use to this level was making "help" resources readily available via phone to new users.
The standard Internet offering, SchwabNOW, "is for the customer who wants to call on the phone and ask questions, or who needs a little bit of hand-holding from time to time," Mr. Duste said. "However, he can still trade over the Web for convenience."
Internet-based trades are confirmed with a receipt on the Internet and through the mail, but, Mr. Duste said, "sometime down the road, a digital certificate may be a very good way to replace the paper confirmation."
In addition to its Internet offerings, Schwab runs one of the nation's largest call centers.
At facilities in Phoenix, Denver, Indianapolis, and Orlando, human operators handle 85,000 to 90,000 phone calls a day. Including automated telephone response systems, Schwab fields more than 300,000 calls per day.
Schwab executives say their focus on automation is calculated and inten- tional-and it sounds far more explicit and comprehensive than at the typical commercial or savings bank.
"Technology is not a sideline," Mr. Duste said. "It's actually a core part of the brand. One of the things that technology executives at Schwab enjoy is that the technology people are treated like business people because we view technology as a core piece of our business.
"Almost every business decision involves a discussion of how we're going to use technology to do things for our customers that no-one else can do," he said.
This ethos now is being extended internationally.
The company sees on-line investments in increasing demand in Asia, Latin America, and the major European economies of Germany, France, and the United Kingdom.
In the first quarter next year it will launch Charles Schwab Europe. Customers around the world will get access via the Web to U.K. and U.S. securities and trading through a single account.
Another international unit, Schwab Cayman, offers access to U.S. securities as well as to 200 offshore mutual funds. Schwab Hong Kong has access to 140 Hong Kong-registered funds and U.S. securities.
Response to the services has been good. In Hong Kong, 50% of trades are done on-line; in the Cayman Islands unit, the use rate is 75%.
The average on-line customer makes four or five trades a month.
This demand is enough to keep Schwab busy for now.
"At the moment we have no plans to open any more offices beyond Hong Kong and Cayman Islands," Mr. Duste said. "We felt that those were two major world financial centers, in addition to London, that were important to our customers and potential customers."
But Mr. Duste said he would like to see international customers enjoy the same level of service to which customers in the United States have grown accustomed.
"Being able to provide the world market with a no-load mutual fund would provide the same sense of value we give to our U.S. customers," he said.
Schwab now has customers in 88 countries coming in through the Web.
"On the international front, we've discovered that the Internet has been hugely successful, partly because customers can get direct access to Schwab any time of day or night for the price of a local phone call," Mr. Duste said.
The brokerage has taken its voice and data networks and begun to extend them around the world.
So now it can take phone calls from the Hong Kong and Cayman units and route them to one of the four call centers in the United States.
"We've put in the beginnings of a communications framework that allows us take a call from anywhere in the world and route it to any other place in the world," Mr. Duste said. "We will get to the universal toll-free number when the business has grown to a level that will support it. In Hong Kong, we give out a local phone number, but if that office is closed, the call will automatically roll over to another location.
"I think it would be fair to assume that we will have a very strong virtual presence and that virtual presence will often be the first entry into a particular country," Mr. Duste continued.
"Then, if we develop a large clientele in a particular country, we may find that having a local office is important, and we may consider having a physical presence there."