Amazon, Google and Facebook pose a much bigger threat to banks than financial technology start-ups despite concerns the latter are luring customers away, the World Economic Forum has warned.
The fintech sector, said to be worth around £7bn in the UK, has been a key area of focus for Chancellor Philip Hammond and Bank of England Governor Mark Carney this year amid fears traditional banks could lose customers to cheaper, more accessible new players.
But a report by the World Economic Forum suggests the sector should be directing its worries elsewhere, arguing that start-ups have not grabbed as much market share as expected while existing tech giants have poured money into areas such as artificial intelligence, big data customer analytics and cloud computing.
As financial institutions look to these areas as a way to compete, the report noted that many had become reliant on the likes of Amazon, Google and Facebook for expertise. Big firms including Aon and Carlyle are among the customers using Amazon’s cloud computing platform, for example, while the tech giant’s voice-activated system Alexa has drawn in Capital One and Liberty Mutual.
Others are using Facebook apps to lure in customers, with Brazil’s Banco Bradesco letting customers conduct day-to-day banking through the social networking site.