If you’re fourteen years old, you’re probably rebelling against your parents, constantly on your iPhone, and Amazon Founder Jeff Bezos has his eye on you, or more accurately, on your money. In your short lifetime, Amazon’s revenue has increased by 2,500%, reaching $178 billion in 2017. Their next venture? Amazon banking: Developing a better banking experience for digital-savvy Gen Z before banks do.
Most teenagers can’t qualify on their own for a credit or debit card, but this doesn’t mean they don’t have any money. In a recent Bloomberg article, Jennifer Surane explains how Amazon is poised to create a checking account-like product specifically for people who don’t have a card. If they are successful, they will be capturing a segment of the population that will then be devoted customers for a long time to come.
Personalized Service is Key
It’s not just Gen Z that Amazon is targeting in its banking venture. In Katbat CEO Ray Peloso’s blog post about the millennial economy, he cites an Accenture study that revealed 50% of the Gen Z and millennials surveyed would be willing to switch to Amazon or Google for their banking needs. If an institution has their data, millennials expect personalized service. Many banks today are not providing enough customization. If Amazon can provide a highly personalized banking experience, banks could be in trouble.
Amazon has always been smart about their users’ lifecycles. Just had a baby? Amazon Family offers discounts on diapers and baby food and even shares parenting tips. Are you in college? Prime Student offers a discount on Amazon Prime. Offering digital banking options for people without credit cards is just another way they are being savvy about what their customers need and want.
In our recent whitepaper on banking and the gig economy, we share the challenges gig economy workers face when it comes to finance. This is another example of the millennial population not getting what they want and need from traditional banks. Gig economy workers make up 25%-35% of the U.S. workforce, so banks would be wise to provide products and services for them. If they don’t, something tells me that Jeff Bezos will.
What are your thoughts on Amazon moving into the banking arena and its pulse on Gen Z? Reach out to us anytime at email@example.com to discuss all things banking and see how Katabat can help you deliver a competitive, more personalized customer experience.