Amazon is a threat to banks — just not in the way you think
For Amazon, it’s more about disrupting banks, not necessarily displacing them.
To date, the Seattle-based e-commerce giant has a foot in payments, cash, small business lending, consumer credit and an initiative to get people to shop with Amazon using their debit cards. Research also shows millennials have no love for traditional banks and would rather manage their money with a more reliable and “fun” brand like Amazon or even Facebook or WeChat, but that’s just 23 percent.
Still, observers agree that trend is a little sensationalized; that although we’re seeing an Amazonification of financial services — whereby the incumbent banks are platforms for all other non-bank providers of financial services to plug into — legacy firms aren’t actually losing accounts to Amazon. But, they are losing direct interactions with customers. For example, USAA and Capital One are both experimenting with Amazon’s digital assistant Alexa as a new consumer banking channel.
“The threat is not about [technology companies] taking market share, it’s that they become the customer interface and the banks become the ingredient brand,” said Alyson Clarke, a principal analyst at Forrester. “When you lose that connection with your end customer, you’re simply a no-name product manufacturer. And when you no longer have brand, the only things you have left to compete on are price and features.”
Further, large technology firms are becoming more and more operationally important to the financial system, particularly as companies move their data to cloud storage and increase opportunities for consumer facing artificial intelligence, according to Jesse McWaters, the World Economic Forum’s project lead on disruptive innovation in financial services.
“Three or four years ago it was common for senior banking executives to fairly declaratively say they would never move systems off premises, and now it’s becoming increasingly important for data to be processed in the cloud,” he said.
-
Why one agency is drawing inspiration from Jesus and avocados for Super Bowl marketing
Lerma's founder and CEO talks about the relevance of a multicultural marketing approach, the growing influence of Hispanic culture and more.
-
Google-Meta duopoly continues to creak in their ‘heightened maturity’ as Amazon, Apple ascend
The shadow both Apple and Amazon have cast over advertising dollars is getting longer by the quarter.
-
Why advertisers are still making space for experimental budgets even with economic uncertainty
Even in the midst of economic uncertainty, advertisers are bullish on experimental ad spend.
-
SponsoredWhy Best Buy Ads sees retail media as integral to its customer-centric purpose
Sponsored by Best Buy Ads Retail media networks have become critical for marketers, with retailers investing in ways that enable advertisers to engage consumers across online and offline channels. Given the wealth of retailers’ first-party customer data and measurement capabilities, retail media networks have become a natural fit for augmenting performance marketing programs. Alongside the […]
-
Marketers move beyond the basics of ChatGPT with new tools
Companies are setting their sights past OpenAI's free version and integrating their own data sets for new ads, bots and idea generators.
-
How the recession could impact brands’ metaverse spending
Digiday reached out to four experts to figure out how brands’ spending in the metaverse might change as they tighten the purse straps in preparation for a recession. Here are some of the biggest takeaways.
