Bogotá, May 3rd, 2018.- The presumed ‘Bank of Amazon’ appears today as a huge challenge that, although it is still somewhat unknown, it is not less disturbing for traditional player in the banking arena: Daniel Aguilar, VP of Latinia for Latin America, believes that “it implies a certain change in paradigm in the classic canons of how the banking industry has been operating for decades, and with what objectives, and its impact will be greater than the arrival of the challenge banks or the fintechs themselves, the first ones often seen as private labels of the incumbents and the second as necessary cooperators of the new financial scenario “. Banks have great capacity for scaling, but not speed, fintechs, on the other hand, have the speed, but not the scalability, but Amazon has both virtues, which makes it a “sensational threat”. Although this is not the only case of a big tech flirting to become a bank, it is the one that has generated more noise, not in vain has already launched their first initiatives in countries such as India or in the case of Latin America, in Mexico.
In any case there is a tremendous difference between a bank as commonly understood and what amazon plans to do; as well as for a traditional bank products like credits represent main goal of their business, for Amazon they are only a mean; the giant of Seattle only tries to supply them to generate more business on its platform, for that reason his approach in margins can be marginal, pushing them to the downward; that is, the company does not intend to make money with the credit margin, but to generate more volume of business on its traditional business, easing its concession. “The change is thus paradigmatic and is perceived with some fear at this time, because it is still surrounded by a halo of ambiguity that magnifies this uncertainty, a state that marries very badly with a business as conservative as banking, and more in Latin America.” says the Latinia executive.
The bank has the feeling, and in some countries are evidences, that Amazon is flirting with its customers, and the worst is that these like to be courted. “Amazon has been for many years reengineering and reimagining how it should be an optimal relationship with the customer, based on frequency, convenience, and the permanent search for the wow factor, that is, the emotional aspect. Incumbents have in front of with three different scenarios that will set new rules of the game, from which three types of possible relationships with Amazon result from; First, win … like Amazon; no bank will be ‘the Amazon of finance’, but some may emulate its success; second, win … with Amazon, that is, create products or services that can be distributed through its platform, creating joint value for the end user; and the third, to lose, a fatal consequences scenario, simply because they become no longer relevant to their clients.
As Amazon incorporates more and new services to its offer, there will come a time that the customer will ask himself, and why not my finances too? “If the customer sees that Amazon recognizes him and offers relevant content from personalized offers based on his preferences and needs simply by letting oneself know, that is, by providing information about their tastes and likings, the same thought but applied to finances is immediate and feasible, the “one-click”, paraphrasing Amazon”, concludes Aguilar.
