If Amazon, Facebook and Google become banks

Other than banks, sims, investment houses and credit brokers. In the financial sector, the big names of the future could be the companies that today already dominate the Internet and the technology sector: Google, Amazon, Facebook and Apple, which business consultants identify with the initials Gafa and that for some time have been considering expanding their business in fields now dominated mainly by banks and investment houses.

Covenant between big 

The recent agreement signed by the e-commerce giant Amazon with the financial group Bank of America- Merrill Lynch to jointly offer loans and financing has made headlines. However, this alliance is only a small step in a long process that has been underway for some time and will probably take us a long way towards a profound transformation of the savings and credit industry.

As Sole 24Ore recalls, since 2011 the e-commerce group founded by Jeff Bezos has been offering to finance companies that sell online on its platform, through a service called Amazon Lending. Now, after the agreement with a financial group of the caliber Bank of America-Merrill Lynch, this business remained marginal in the offer of Amazon seems destined to grow like a river in flood.

The payments business

But other network giants are also moving in the same direction. Just a few weeks ago, the world’s largest social network, Facebook, applied for a banking license in Ireland, with the aim of offering payment services throughout Europe through its platform.

The same goes for Apple and Google. They have also chosen the business of electronic payments (with Apple Pay and Pay with Google services) to start exploring the financial services sector. It is difficult, however, that their range of action is limited to electronic transactions only. The big names on the Internet, including those operating in China such as Baidu and Alibaba, have an enviable competitive advantage: they have already conquered billions of users around the world on whom they have collected a myriad of data, about their habits of life and consumption.

The Treasure of the Millennials

Starting from this basis, it will not be difficult for the big names in the technology sector to start selling financial services, especially when the so-called millennia, young people born from 1980 onwards, start to have money to spend and invest. The members of this generation born and raised in the digital age reason with a very different logic than their parents. When they have to choose a financial services provider, the millennia will rely much more on the information they collect on the web than on the advice of friends and relatives or the first credit institution they find near home.

According to a study carried out last year by the multinational consulting firm Accenture, as many as 40% of the millennia are already willing to buy banking services from companies such as Amazon or Google. 36% would like to buy an insurance policy, while 56% are even willing to receive a financial advisory service. But the most surprising fact is that in Italy, where savers are often prudent and risk-averse, the share of people who would buy financial instruments from the big of the Internet is even above the average of industrialized countries and varies between 46 and 52% depending on the category of products. Banks all over the peninsula have to worry about it.

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