Amazon Bank? How would Bank Of Amazon impact banking services? (AMZN) – AMZN News Today – Sat May 19
In recent years, Amazon has moved to the cloud with web storage, started providing video and music streaming services, bought Whole Foods grocery store. And now they plan to get involved in the pharmaceutical and furniture industries and even banking.
The reason for all of these investments may be because Amazon stocks correlate parallel with the growth rate and potential of the business going forward. From this perspective, it makes sense that Amazon needs to try out adjacent industries and markets on an ongoing basis. In order to maintain the value of its stock price, it is inevitable that Amazon gets involved in the financial arena.
This is alarming for traditional banking service providers. In a survey conducted by Bain & Company in 22 countries, participants said they trust Amazon and PayPal in the same way they trust their banking providers. 73% of participants said that a financial offer made by Amazon, PayPal or Google turns them on more than an offer made by their traditional bank.
If the rumors turn out to be true and Amazon decides to go into banking, it would have significant advantages over regular banks and credit unions. These benefits include improved data, better user experience, an advanced digital platform, and superior consumer loyalty. This is why a study conducted by Infosys Finacle concludes that technology companies such as Amazon, Facebook, Apple and Google are considered a “significant threat”.
Amazon already offers credit cards and Amazon Cash which resembles a debit card that allows its users to make deposits up to a limit of $ 500 to their Amazon accounts from a wide variety of retail stores. such as CVS, GameStop and 7-11. The company also offers short term loans with lower interest rates. In June 2017, Amazon said it had made a $ 3 billion loan since 2011. One thing is for sure, Amazon is starting to look like a bank every day.
Considering Amazon’s involvement in credit cards, loans, and payment services, it makes sense that the company will be offering retail banking services very soon. Amazon is expected to reach a small to medium-sized bank in 2018 to comply with regulations and gain experience in the field.
Most experts in the field agree that if Amazon goes into the business, the business will be there and, large and small, all financial institutions in the industry will feel its significant impact.
In the past, the Bank Holding Company Act prevented commercial enterprises from participating in the banking sector. However, times seem to be changing. Acting Chief of the Office of the Comptroller of the Currency (OCC) Keith Noreika recalls that the origins of the act can be chased until 18e century. He considers that the law is not up to date with new developments and should be reconsidered.
All this does not mean that traditional banking providers have to fear the future. There is no reason to feel threatened by digital system providers like Amazon, because neither Amazon nor others like Google, Facebook or Apple can dominate the traditional banking industry all at once.
Disclaimer: The information on this site is provided for discussion purposes only and should not be misinterpreted as investment advice. This information does not in any way constitute a recommendation to buy or sell securities.