Morgan Stanley, one of the largest banking firms in the US, suffered an overall breakdown when it came to its wealth management platform. This platform is, by chance, the lender’s largest moneymaker. This occurred during a historic market rout but was claimed to not be due to sheer orders flooding the system.
Promises That It Wasn’t Overwhelmed
The power outage was reported by the CNBC back on Wednesday and cited a recorded message that the bank had made for customer service.
The platform itself caters to its wealth-management clients and had broken down that afternoon. The official reason given for this overall breakdown was attributed to a technical issue. The utmost assurances were given that it wasn’t by virtue of volume overwhelming the platform, as what happened to other platforms over the past two weeks.
Expanding Into The Middle Class
Morgan Stanley stands as global wealth management and investment banking firm. It employs more than 60,000 people across the globe and has three primary ways of getting its money. The first is wealth management, then institutional securities, and lastly, investment management.
The American banking firm has made attempts to expand its core regions, however, as it made an agreement to by E-Trade, a discount brokerage firm, for about $13 billion. With this, Morgan Stanley plans on expanding into the middle-class American’s wealth management markets.
Competing With The Heavyweights Of Another Sector
With E-Trade added to the fold, Morgan Stanley will be capable of tapping into a new source of revenue, adding another 5.2 million in customer accounts, as well as $360 billion in assets.
With the takeover, Morgan Stanley will inherit a large share of the online trading market, putting itself in better competition with the links of Wells Fargo and Bank of America.
Overall Market Collapse
JPMorgan Chase & Co had two of its trading platforms fail when the financial markets were in a nosedive last week. One of these platforms catered to wealth-management clients, as well.
A further cause for the possible collapse of JPMorgan’s infrastructure is the overall instability of a segment of it. This segment was retroactively fitted in to help systems accommodate high volumes, but was not made to withstand any more than that. As a result, this caused a significant delay when it came to providing clients with their execution updates and order status, according to the bank.
During the violent turbulence of last week, other platforms experienced overall difficulties as well, due to the sheer amount of volumes pushing through it.