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.
‘Exceeded our marketers readiness’: As e-commerce growth accelerates, Dentsu is adding a new practice to meet the demand
The commerce practice was already in the works but the pandemic and changing consumer behavior due to the pandemic accelerated it.
‘Hooked on the Facebook drug’: Media buyers say smaller brands will return to the platform, but bigger brands will continue to boycott
Large consumer brands aren’t happy with Facebook’s response to the boycott so far and will likely wait until fall to reconsider the boycott.
Nobody in elevators, fewer gag lines: How an agency is remaking its ads to fit the coronavirus era
The process has allowed the full-service agency to enlist its post-production arm to help its clients adjust ads rather than press pause on advertising due to the ad content.
SponsoredAs live sports roar back onto screens, brands capture a social-media lift
By TJ Adeshola, head of U.S. Sports Partnerships at Twitter Live sports are back and sports fans couldn’t be more excited. It’s no surprise that communities across the country are welcoming their teams back with open arms. For many, the return of sports brings a sense of normalcy — 67 percent of U.S. fans see […]
Member Exclusive‘People have to be more aware of bullshitters’: Why there’s a push for more realism in advertising now
In advertising, there’s long-been a “fraud problem” in that the industry has a surplus of poseurs or bullshitters.
Why beverage startup United Sodas is testing out a new out-of-home strategy
Out-of-home advertising has slowly picked back up in recent months. But now DTC brands, who've long favored the sleek subway ads, are finding new ways to target potential customers as pedestrian foot traffic picks up in cities.