The US tech giant has integrated accessibility and convenience into every aspect of its business.
My dad always said: “If you want to get ahead of the leader, don’t follow his tracks in the snow.” That is just as true for Maersk, the largest shipping company in the world with a 21% market share, as it was for me as a boy.
As part of a client exercise with Maersk’s staff three years ago, we rolled out a simple, yet effective mind game. We asked, “What if Maersk bought Uber?” Within minutes, every Maersk employee was seeing more clearly, loosening their muscle memory and coming up with ideas.
This call to think outside the box worked: three years later, Maersk has adopted a completely new way of thinking and its share price has increased by 300%.
This in mind, I can’t stop thinking about Amazon. With a net profit approaching $1tn in market capitalisation, Amazon is a highly customer-oriented organisation. It has disruption at the heart of its business and a constant stream of new ventures on its books, including healthcare, game streaming, self-driving cars, food delivery, a cargo airline and even a hair salon — yes, they just opened their first in Spitalfields, London.
So, let’s get back to banking. Isn’t it time to disrupt some of banking’s more conventional aspects?
Let’s start with the regulators. Over the years, I’ve seen my fair share of lack of common sense when describing banking procedures.
For example, consider how one well-known bank used to handle suspected money laundering; its rules stated that the bank needed to inform clients well in advance of an investigation taking place. Unsurprisingly, in practise, after informing the client, it did not find any evidence of wrongdoing. This is just one example of the lack of logic often found in banking regulation and governance, in both internal operations and a bank’s relationship with clients.
Moreover, as I’ve been advising banks for many years, I’m sometimes left to wonder if an industry which has been around for a few thousand yeard has ever updated some of its rules.
Amazon will do all the stuff every customer dreams of, but has given up expecting from their conventional bank
Remember Amazon versus the publishing industry — the uproar as Amazon systematically squeezed Little Brown publishing into line? Or what about the latest Amazon union conversations in the US, which ended almost as soon as they began? Remember when Amazon tried to implement drone delivery? US and European authorities said no. Amazon pushed, the authorities folded and now we have drone delivery.
Whereas most banks can be paralysed by industry regulators as compliance departments who fret about losing their licence — creating a byzantine set of rules which even the regulators struggle to understand — a new Amazon-type bank might be one of a handful of institutions equipped enough to challenge the traditional banks, and win. It’ll do what DocuSign has done for contracts: introduce one-click services, simplify exhaustive loan documents and approval processes, and make the language more human.
Amazon’s promise of delivery of everything for just $99 a year is probably the world’s best recruitment tool. On any highway in the US, you’re guaranteed to spot at least 10 Amazon trucks, and in the UK, if you drive from London towards Northampton, you are likely to spot several enormous Amazon warehouses. It hints at the growing power of Amazon’s discounting strategy.
So, what would happen to banking fees if Amazon was in charge? Amazon would place the customer first, flip the model on its head, begin offering ancillary services and recover the lost income either via volume or extra sales.
Accessibility and convenience led Amazon to introduce one-click, setting up the ‘Amazon Go’ store where no checkouts are needed and placing more than 100 million ‘Alexa’ virtual assistants in homes across the world. It has not only made its services accessible, but contextual: its services are present whenever the purchase moment occurs.
This would be the driving principle of an Amazon bank. Talk to Alexa to transfer money, visually verify your payment, and get artificial intelligence to suggest new investments and financial opportunities consistent with your customer profile. Perhaps, a new app could compare the various interest rates and immediately suggest where you should keep your money. We may even see cash delivered to your doorstep via a drone one day. This would have sounded far-fetched just five years ago.
But here’s the reality. Amazon will do all the stuff every customer dreams of but has given up expecting from their conventional bank. Of course, banks can argue that these are nearly impossible dreams. But the booksellers, publishing houses, retailers, supermarket chains and data warehouses all said the same as the Amazon logo travelled the world, mirroring the smile on its customers’ faces.
Martin Lindstrom is an author and founder of Lindstrom Company, a business transformation group.
