Amazon Bank coming to UK?

Amazon is in talks with several leading banks to offer a "checking-account-like" product for customers, according to the Wall Street Journal.

And a British bank could be on the horizon, via a FinTech acquisition, according to ParcelHero’s Head of Consumer Research, David Jinks. “It’s not only in the US Amazon might be eyeing up the banking sector,” he comments. “As a result of the loosening of British banking regulations in 2013, an A-Z of new online banks from Atom Bank to Zopa have been announced here in the UK. Amazon could consider creating its own British bank from scratch, but that would involve overcoming significant regulatory hurdles. A number of UK challengers are already consolidating, and some may well welcome an approach from Amazon.’”

Also of interest: Amazon customers say yes to banking sector disruption rumours

Last year, the e-commerce giant considered buying Capital One, so the idea of moving into banking is obviously very attractive to it. And many of its regular customers are keen on the idea. Global research from Accenture reveals half of all Amazon users would consider a savings account with the company, and 45% are open to the idea of it being their primary bank account.

“Amazon is already a fully-fledged money lender to retailers,” says Jinks. “It has made loans totalling well over $1.5 billion to merchants in the US, UK, Europe and Japan. And it also already has its own UK credit card: the Amazon Platinum Mastercard gives reward points whenever users shop on it. Behind the scenes it’s actually run by NewDay, but were Amazon to run its own banking services, access to full credit card information would give it even more vital data about its customers’ shopping behaviour. Industry analysts are already getting excited about the prospects for an Amazon bank."

He adds: "Amazon could become the third biggest US bank if it wants to, according to a Bain & Company report. I certainly wouldn’t bank on the company not having a significant online banking presence in the next five years.”