What would happen if Amazon were to get into the banking business?

By Tucker Mathis, CEO, FINSYNC, Inc.

FINSYNC is rapidly building a network of banks that use our technology to connect with customers in search of financing online. As a “fintech” company, we are often asked about other technology companies and their potential impact on the banking industry, should they elect to throw their hat (or weight) into the ring. Most commonly — Amazon.

Uniquely enough, I love the question because it teases out something I am very passionate about, and that’s the desire to be in the relationship business (as opposed to transactional). If banks want to build a defensible competitive advantage over Amazon banking, they too will need to move to the mindset of being in the relationship business.

This may sound obvious, but it’s not. I meet with bankers all the time that speak of a desire to innovate, then describe the box their idea needs to fit within and the areas where it cannot overlap. If only I could walk into my next bank board meeting with Clay Christensen, who authored The Innovator’s Dilemma. He has a message in that book that everyone in the banking industry should stop and read, if they haven’t done so already. If I had to summarize it in one sentence: Innovating in fear of staying within a box, or a previous product, process or price — isn’t innovating.  

For a bank to truly be in the relationship business, they, like Amazon, have to innovate and always iterate in an effort to earn the customer’s business and loyalty long term. For most banks, this requires a change in mindset and a willingness to adopt new technology and processes.

All of this can be overwhelming for a bank. I recently attended a bank conference where the bankers were outnumbered almost three to two. That is, there were three vendors for every two bankers at the conference. In this kind of environment, how does a bank decide with whom to innovate? Or, to partner or to build?

Building is very expensive and risky and should only be considered by very large, well-capitalized banks. For the other 4,000-plus banks and 6,000-plus credit unions, I can help make your job easy. Think about your customer first. Look for and then adopt the solutions on the market that are proving to create the most value for your customers while also helping your financial institution to increase revenue, reduce risk and improve the overall relationship you have with your customers. If your customers win, you will win irrespective of who enters the market.

FINSYNC makes it easy for you to connect with your customers online in order to strengthen these all-important relationships, and ultimately fund more loans. Joining FINSYNC’s Lending Network allows you to offer your customers an online financing option that goes beyond traditional lending — and requires no IT investment or implementation on your end.

When you’re not ready to approve a loan, FINSYNC helps you continue the relationship by presenting the business with actionable steps they can take to secure financing with you in the future. We also help businesses with advanced cash flow analytics and projections that allow them to show you exactly where their business is going. It’s a value-add for both you and your customers, and it all begins with your relationship.