Jeff Bezos once told Amazon shareholders that “failure and innovation are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.” In just a few words, he succeeded in summing up the spirit that has underpinned a career based around revolutionising existing systems and paradigms. Not content with having turned the world of global commerce upside down and promised to take us to outer space with his Blue Origin, the visionary owner of the Washington Post is continuing to experiment in new sectors and has now entered the world of savings. Here, we explain how Bezos is aiming to change the way we manage our savings.
New challenge for the omnivorous, omnipresent entrepreneur
Mr. Amazon is not satisfied with merely having changed the way we shop. He’s not content with having exceeded the capitalisation of Google’s Alphabet back on 20 March, making Amazon the second biggest company on the Nasdaq Stock Market. Bezos doesn’t want plaudits, but omnipresence. He doesn’t want to devour just one piece of prey. He wants it all. The theme linking all of the various businesses he’s got involved in over the years has always remained the same: the aim of becoming an integral part of the lives of their clients by tapping into the most basic needs of the human soul.
While Amazon made it into our living rooms with Alexa and our fridges with Whole Foods, Bezos is now turning his attentions to our savings, with the aim of reducing the faff involved in saving to a minimum, without added effort or time-consuming processes. According to the Wall Street Journal, Bezos is currently in negotiations with some of the leading banks in the USA, including JP Morgan, in order to create a product similar to current accounts that can attract millennials and all those who steer clear of banks – either by choice or necessity.
New partnership method
There’s a significant difference between this venture and the other sectors which Amazon has entered thus far. This time, the aim is to build partnerships rather than go it alone and be better then all competitors. In short, Amazon don’t want to become a bank in the strict sense of the term. Banks can breathe a sigh of relief, then – at least for now. For Bezos’ new creation, backed up by the financial clout that just under $700 billion and the confidence of investors gives you, would have risked revolutionising the entire financial sector. However, the more stringent rules approved following the crisis seem to have closed the sector off to external competitors, for whom access is limited by limitations and obstacles that make the prospect of making any inroads an unlikely one.
The upshot of this is that Amazon has decided to find allies. Top of the list is JP Morgan, the bank run by Jamie Dimon, already an ally of Bezos and Warren Buffet’s Berkshire Hathaway in their attempts to revolutionise US healthcare.
Battle to attract millennials
Any alliance would be a big deal for JP Morgan, who would be sealing an agreement with a potential rival and thus strengthening their bonds with a company – Amazon – that is hugely popular with millennials, a demographic group renowned for their rapidly changing habits. From its side, Amazon could be able to reduce the amount of commission it has to pay to financial institutions and gather data on the income and spending habits of consumers.
According to a survey carried out on 1,000 Amazon customers, 38% would trust Bezos’ colossus to manage their finances in the same way they do a conventional bank. Bezos has been weighing up a move into the financial sector for years as a way of reducing the commission he has to pay to banks, so an agreement with a big player like JP Morgan would allow Amazon to hit its target of reducing costs without risking the type of failure suffered by Walmart, who were forced to abandon its banking ambitions after being beset by criticism.
In Bezos’ eyes, there has been one constant throughout history – the fact that “we humans co-evolve with our tools. We change the tools, and the tools change us, and that cycle repeats”. His mission has always been to use his seemingly magic touch to develop the tools we use on a daily basis – banking is just the latest target. It’s unlikely that he’ll pull off a repeat of the miracle he achieved in 1994, when he transformed a no-name online bookstore into the largest e-store in the world, but you can never say never when it comes to Mr. Amazon. Revolution is always just around the next bend.