Why there is no Amazon of banking

by. Ron Shevlin

According to a recent American Banker article titled Amazon Becomes Retail Bank Role Model:

“Amazon has revolutionized everything from publishing to online shopping. Can it save retail banking? At Retail Banking 2014, bank execs repeatedly invoked Amazon as an example of what they aspire to become. One said ‘Amazon was conceived around the use of data and the customer experience.’ Another called Amazon ‘the most visible example of using data to customize a customer experience.’ Another called the Amazon model a possible savior for the industry.”

My take: These views reflect a complete misunderstanding of what Amazon is.

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I don’t dispute for a moment that Amazon makes great use of the data it gathers, and that it delivers a superior customer experience. But that’s not what Amazon “is.” What Amazon is is one of the world’s largest distribution systems.

The fundamental difference between Amazon and banks is not the use of data or the customer experience. It can be summed up by this:

Amazon does not care what you buy, as long as you buy it from Amazon.

That can’t be said about banks. Banks want you to buy their products and services, and don’t care who you buy them from (although the overwhelmingly majority of time those products will be purchased directly from the bank).

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