Magazine article Independent Banker

Keep These Competitors in Mind, Too

Magazine article Independent Banker

Keep These Competitors in Mind, Too

Article excerpt

As community bankers, we have grown accustomed to competing on all fronts. Whether it's systemically important financial institutions (SIFIs), credit unions or nonbank fintech companies, competition has only grown more fierce. But they're not the only threats to keep on your radar.

Beware Big Tech

Although it does not get much press, I believe the biggest competitive threat to all banks is Big Tech, also known as GAFA, or Google, Amazon, Facebook and Apple. All of these entities have very large digital customer networks in different primary businesses: search, retail shopping, social media and consumer goods, respectively. None of these entities would particularly like to get into the banking business. However, they are attacking the fringes of banking solutions to provide a more complete customer experience. Amazon is already competing with rewards-based credit cards with its Amazon Prime card.

Fintech

Many fintech companies are carving out niches by building products and services for banks, but there are still some fintechs that have chosen to compete directly with banks. Many of these companies are built on a 100% digital or mobile banking experience, and many have roots outside the U.S., such as Atom Bank and Revolut, both based in the United Kingdom, and N26, based in Germany. While these companies have not yet gained a foothold in the U.S., they are only in the beginning stages of their plans to launch their solutions. This process has been slowed by U. …

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