At the end of 2017, Bloomberg wrote an expert analysis on whether 2018 would be the year Amazon became a bank. Now, before Q1 2018 has elapsed, it’s all but confirmed.
In line with predictions I made earlier in 2017 (reported by CNBC here) the report says 2018 will likely see more mergers and acquisitions as well as deeper forays (into banking and the like) by Facebook and Amazon.
An Auka commissioned survey of bankers across 19 European regions from late last year* found that almost four in five (78 per cent) said they either didn’t believe or didn’t know if their existing channels were good enough to withstand competition from third-parties – i.e. other banks, fintechs and large tech companies such as Amazon. More than a quarter (26 per cent) said they thought large tech companies could take the role of a bank within the next five years.

Come March 2018 and the speculation that Amazon is set to become a bank has intensified. This is thanks in part to a new report from Bain & Company and news that Amazon is on the hunt for a bank to partner with.
This handy infographic produced by consulting powerhouse Bain outlines key findings from their report. Some of the key findings include the fact that 40 per cent of a bank’s operating costs are taken up with running branches and contact centre networks. The bank of Amazon wouldn’t have that outlay because they wouldn’t have any branches or the contact centre model of a traditional bank.
Something we have spoken a lot about and that has been also factored into the Bain report is that Amazon (and other third-parties) will look to go direct to account, meaning savings of around $250m in credit card fees in their US market.
The report also touches on the fact consumer trust in tech companies is increasing. Half of all those surveyed and three-quarters of those aged between 18 – 24 expect to buy a financial product from a tech company in the next five years.
Bain recommends that banks need to do three things:
- Get serious about putting customers first
- Move faster
- Use new distribution channels and partner with tech firms

Source: Bain & Company
Sound familiar? We’ve been touting a very similar line for almost two years. Most recently, at the beginning of February, when discussing what Apple Pay iMessaging meant for banks. We gave the following advice, then:
Broken down simply, there are three distinct steps banks must take to ensure they win the mobile payments race.
- Partner with a mobile payments provider like Auka to replicate the success of bank-owned mobile payments channels in the Nordics
- Become the open-banking pipeline for others (merchants, customers and the customers of banking competitors alike)
We also frequently speak about why banks need to create solutions that their customers actually want. See: how to recruit new customers using mobile payments.
So, now an international consulting company with a lot of clout has confirmed without a doubt that Amazon (and by association, its fellow GAFAs**) is on track to disrupt banking for many traditional players. We totally agree with Bain’s recommendations about what banks need to do now. Our advice about what banks need to do hasn’t changed.
We have a lot of firsts under our belt. Amongst them, we were first to create and launch an award winning mobile payments platform in Norway, the first fintech to partner with a large bank and launch a successful mobile payments solution and we were the first licensed financial services company to operate entirely from Google’s cloud platform.
Banks in Scandinavia are the only banks in the world to have successfully implemented and monetised their own mobile payment channels. They followed the same model that the large mobile payment success stories – think Alipay – did.
We can help you to follow this advice by creating and launching a mobile payments channel in your region in a very short amount of time. Talk to our experts and request a free demo for your bank.
Get in touch.
*LM Research
**Google, Apple, Facebook and Amazon