Page 17 - May 2018 Disruption Report Flip Book

DIGITAL BANK JANMUAAYRY20210818
transitioned from mobile payments to e-commerce, gold, flight tickets, and the latest in investments—replicating Ant’s model in China to find adjacent value pools.
Regulations are one area that often limits BigTech’s ability to enter into banking domain, particularly around lending. Where regulations are tight, players can still get into lending via partners. In China, Alibaba has gone “all in” into the finance world. Notably, a few entrepreneurs such as Jack Ma have been able to drive the agenda and build the financial ecosystem.
Macro-economic and socio-economic factors in the country they operate in are also important. In Western countries, one of the other concerns
for FinTech or BigTech getting into financial services is the fear of getting regulated by multiple regulators, as the case in the U.S. and Europe. Even in India, while the wallet players have had a relatively free run, from March 2018, KYC regulations have been tightened.
...[I]f if you are a platform business and have enough consumers/ merchants, it gives you a certain degree of freedom, which other businesses may not have, to explore new areas. Jeff Bezos, Amazon’s CEO, looks for areas that have a problem worth solving and then applies Amazon’s platform agility to go tackle it.
However, I do not believe that Amazon would want to be in the financial services business as a principal and its recent moves such as that of looking to partner with JPM on retail bank account opening in the U.S. would be a good example.
Secondly, I think there will be a bigger industry shift between now and 2025 that will see the coming of $60 trillion into direct distribution with direct selling for B2B and B2C through marketplaces. Alibaba and Amazon are placed well for this seismic shift in the business landscape that extends across every sector of industry.
We have already seen Amazon’s intentions in the online-to-offline play with Whole Foods, acquisition of drug distribution licenses in several U.S. states, launching its own global logistics play to rival DHL/Fedex and also a foray into insurance. (Bank of the Future, Aditya Menon and Kathleen Boyle, March 2018)
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