According to the World Economic Forum, major technology companies such as Amazon, Facebook, Google and Apple pose a major threat to traditional banking services.
"The problem of banks and insurers comes down to the fact that large technology companies are abandoning the value proposition of these institutions, performing more basic functions, even if banks and insurers are increasingly seeking to compete with them," the report said. The report emphasizes that cloud computing, customer-oriented artificial intelligence (AI) and advanced analytics are three opportunities that are becoming critical for competitive differentiation of financial institutions. These opportunities also include the fact that technological giants such as Google, Amazon, Facebook and Apple have much more experience than existing banking organizations. As a result, many banks and insurers are turning to technology firms to provide these basic functions.
For example, Amazon Web Services (AWS) provides services to dozens of financial companies, including Aon, Bankinter, Capital One, Nasdaq, Pacific Life and Stripe. The result of the connection between Amazon and Capital One, American Express, USAA is the creation of voice personal assistants Alexa. "Technological giants can choose and establish entry points to financial services, maximizing their strengths, such as rich data sets and strong brands, using the dependence of existing institutions on them, "says Jesse McWaters, lead author of the study.
Ultimately, financial institutions may need to decide whether they should use the services of large technology players or become dependent on them.