FinTech Stories company, PayKey, looks at the march of Amazon and Amazon Pay and its impact on traditional banking.
“Amazon is investing in enabling faster, frictionless payments to help boost marketplace sales… the company remains very focused on building financial services products. In a sense, Amazon is building a bank for itself — and that may be an even more compelling development than the company launching a deposit-holding bank.”
These highlights are just a sample of quotes taken from an in-depth research by CB Insights, analyzing Amazon’s strategy in the personal finance domain. Bottom line: this is a real threat to retail banks, and it’s just growing. It’s now evident that Amazon, with its unparalleled clout and $23B in cash according to its Q1 earnings report – is serious about attracting customers to its non-banking financial products.
Amazon really knows its customers. Creating a personalized user experience that pulls people to spending more time and money on their website and apps is part of Amazon’s DNA. It has been that way since its very first day, back in the ’90. With such dominance in the marketplace and in consumer mindsets – how can traditional banks compete?
One asset that banks still hold on to is customer trust. People may not like their bank or have any positive sentiment towards it (let’s face it: it’s much more fun to get that package from Amazon you’ve been anxiously waiting for than another bank statement), but when it comes to securing their savings, people still tend to trust their bank more than 3rd party alternatives. A recent Accenture report highlights just that.
So what should banks do to stay in the game?
It all starts with realizing that customers today have a real alternative to traditional financial institutions – and it’s a much more glittering and appealing alternative. It makes sense: why stick to a bank that tries to transform itself to the digital age, as opposed to going with a company that practically wrote the book on digital experience? With this new customer-focus in mind, banks should find new ways to engage with their customers and keep them on board.
And when it comes to engagement, crafting a frictionless digital banking experience is absolutely key. In order to stand tall against such a heavyweight champion as Amazon in the personal finance boxing ring, banks need to make their services a seamless part of users’ digital lives. Having a fancy banking app is simply not enough, if using it means dropping everything else users are currently doing on their phones (and according to a Nielsen study, adults spend six to seven hours a week just on social media).
PayKey helps banks compete with big tech by wrapping their services in the digital experience customers expect to get today. By enabling users to instantly access financial services from ANY app, banks can truly redefine their customer experience, driving engagement and keeping their services always in front of customers – literally.
With PayKey, users can check their balance while shopping online without having to leave the e-commerce app, pass money to a friend from within a WhatsApp chat and get essentially any digital service their bank is currently offering – from within ANY app in the world.
It’s not just a matter of ease of use. It’s a battle of customers’ share of mind, and eventually – on their share of pocket.