A third of consumers in a recent poll admitted that they were open to the idea of the likes of internet giants Amazon and Google to operate as banks. The poll by accounting firm Accenture polled over 32,000 businesses. Of those over a third conceded that they would switch their banking to the internet giants if they offered the services.
So far the two companies have somewhat avoided becoming involved deeply in the finance world. But this poll from a very respected source will surely prick the ears of the companies. It certainly offers an alternative source of income for the giants. It is also certainly a blow for mainstream banking. As traditional business models fall away, the world has struck up a reliance on internet technologies to deal with most of lifes problems. Indeed most major financial institutions conduct significant amounts of business online. It seems that as we move deeper in to a digital age the lines between internet companies and more traditional ones are fading.
Neither company has commented on the idea, though Amazon does have toes in the water with some payment solutions. Whether this could be leveraged in to a standalone product is unknown. But it surely is not hard to imagine the scenario of one of these companies taking a stab at the market. Google especially has a spectacular recent history of being very diverse. It is unlikely that they have never at least considered the scenario. This will make sobering reading for the more traditional banks though. Already under threat from the internet, the move by two of the internet’s biggest companies on to their patch would cause a monumental shift in the business model.
It would also create significant market pressure. As with retail Amazon has been able to leverage its size, low overheads and tax efficiency to become a thorn in the side of traditional retail. It is easy to see them adding the product to their extensive range. Harmonising the product in to their portfolio also makes sense. Much like the supermarkets getting in to banking. The existence of a preferential scheme attached to the payment method is a strong incentive, and one they’ve used well.
We will wait with baited breath to see what the future holds, but it would certainly seem that a Google or Amazon bank are perhaps not as far fetched as we may have thought.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.