StrategyCorps: The ‘Amazon Prime Effect’ Could Significantly Alter Personal Banking
FinTech and mobile content has done more than provide exposure to alternative lenders and financing avenues.
“It’s rewiring the way that we think,” Dave DeFazio, a partner at StrategyCorps told deBanked while discussing mobile devices. StrategyCorps helps financial institutions enhance their checking account offerings.
“We’re addicted to our phones. We’re using them more than ever. The winners in whatever category of business will be the ones that connect better with their customer’s mobile lifestyles and behaviors.”
DeFazio believes that even the flagship personal banking product, the checking account, could be facing a significant makeover in the not-so-distant future.
“There are companies that are kind of nibbling away at the strangle hold on the definition of the traditional account,” said DeFazio. He added that while the public tends to define their banking relationships now by which bank holds their personal checking account, things could be different “down the road.”
Citing a white paper that StrategyCorps commissioned, DeFazio also pointed to deposit displacement as a potential cause of alarm for traditional free checking.
Easy mobile access to P2P platforms such as Venmo, make it more convenient for traditional banking users to opt to store their funds elsewhere.
Another company “nibbling away” at funds that would otherwise be deposited in a traditional checking account is Amazon.
According to Reuters, the e-commerce giant leant more than $1 billion to over 20,000 small businesses operating via Amazon Marketplace between June of 2016 and 2017.
The loans range from $1,000 to $750,000.
The results from this venture could prompt Amazon to purchase a small or mid-sized bank of its very own in the next 12 months.
“This may either be a tactical move or a broad strategic jump into banking, as Amazon seeks more stickiness with consumers and small businesses in consumer lending such as auto loans, credit cards and home mortgages,” CFRA bank analyst, Ken Leon, told Bloomberg in December.
DeFazio says that as consumers grow accustomed to whatever unique perks and advantages that Amazon and other platforms bring to the table for products such as a personal checking account, it could force traditional institutions to work much harder to stay attractive.Last modified: January 26, 2018