What next for Amazon: a bank?
An article in Fintech News, “Bank of Amazon is disrupting the financial landscape”, discusses how the e-commerce giant, often with regional initiatives and without attracting too much attention, has been steadily building a range of financial products that include simpler means of payment, along with loans, insurance, rechargeable cards, repeat transfers or even tools to make deposits.
In short, another example of the extent to which the banking environment is set for major disruption, which may no longer come just from agile fintech companies the traditional banks are hoping they can buy or stop through the regulator when they become a threat, but instead from the second-largest listed company in the world, based on its stock market valuation. A few days ago, the New York State regulator sued the federal government for its carte blanche approach to licensing fintech companies, charging they put users at risk and could undermine local banks’ ability to compete. Whether the same regulator is prepared to take on Amazon, which has more resources at its disposal than most banks, is another question. How will the regulator see the European Union’s PSD2, which greatly facilitates the entry of fintech players by preventing banks from blocking them?
Are any of the traditional banks bothering to take a close look at the financial products Amazon is offering? Have they looked at the results from its trial runs — Amazon is fundamentally an experimental company — in the countries where it operates? Do they have detailed reports about the activities of another huge giant like Ant Financial, to give another example? Or are they “too busy” doing things that seem “much more important” to them?
What reactions might we expect if Amazon launched a checking account? Let’s try to imagine it: would it really be so hard for a company like Amazon to obtain a banking license, and could it inspire enough confidence for large numbers of people to entrust it with their money? Would Amazon’s logins and security systems be as cumbersome and uncomfortable as most Spanish banks? What kind of user experience would Amazon offer in terms of checking one’s statement, making transfers or asking for a loan? Would Amazon do a better or worse job than the banks we know?
Whatever we might think about a company like Amazon, which is still, according to some studies, the company that other businesses fears the most, my feeling is that quite a lot of people would be interested in trying it out. Are the banks just waiting for Jeff Bezos to wake up one day and give it a go, or are they planning for it in some way? Frankly, I do not hear too many bank managers talking about Amazon, and when they do, they do not seem to consider it as a possible competitor. Do they think that their business is too complex and too regulated for Amazon to want to enter it?
Is banking the next big industry destined for major disruption? For the moment, the only thing we can say for sure is that it certainly has all the ingredients.
(En español, aquí)
