American technology giant Amazon had several conversations with banking regulators over the past two years on a wide range of topics including “financial innovation” according to lobbying disclosures. Amazon already has a lending operation that started in 2011 to support merchants that sell on its marketplace.
Technology Firms and their Roles in Finance
US banking regulators were more willing to entertain the idea of granting banking charters to nontraditional firms, opening them up for more business that was earlier reserved for traditional financial centers. While the discussion appeared to be adapted at firms like Social Finance Inc and Lending Club, it advanced rapidly into discussing enormous innovation firms and how their parts could evolve in finance.
Online based Firms Challenged by Leadership and Credit Issues
The online-based firms don’t have a ton of capital and have been challenged by leadership and credit issues. They certainly demonstrate a new way of doing business for big banks, but they hardly pose a real and imminent challenge to Wall Street. In the event that an Amazon or Alphabet truly needed to make an online lending firm, or securities-exchanging framework, they could exhibit some genuine rivalry to the existing finance players.
PayPal and Google Entertaining Banking Ideas
Not only Amazon, PayPal and Google have also entertained banking ideas. They’ve joined forces, creating a lobbying group called “Financial Innovation” together, according to American Banker. In this way, Big Tech in the US is planning to take a page from China, where Alibaba and Tencent Holdings have already become big lenders, using their client data to their advantage.