Fintech today reminds me of the dot-com internet bubble of the late 1990s.

The promise that the internet provided created massive investment and much excitement. Little did we know at that time just how significantly the internet would disrupt traditional habits and business practices. Companies with weird names were being formed nearly around the clock.

Does anyone remember Cadabra? It was formed in 1994. Have you heard of it since? How about Webvan which was formed in 1996? Where are those companies today?

Several thousand companies have come and gone since the 1990s. The companies that are still around have become accepted, even dominant, and have significantly impacted our daily lives in unimaginable ways – personally, socially and professionally.

I never thought that I would prefer shopping over the internet compared with making in-store purchases. Last Christmas, however, this baby boomer did all of his holiday shopping through the Amazon app on his ipad. It has become my “go to” source when I need to buy something – virtually anything. For me, Amazon has nailed it. The Amazon app is excellent; their client service cannot be beat- the return process is hassle-free with no questions asked regarding returns; and their prices are very competitive.

It’s easy to forget that Amazon started as an online bookstore considering its breadth of products available today. It is easy to forget, unless you were involved with Borders, an international book and music retailer that at one time employed 19,500 people at stores throughout the U.S. Borders went out of business in 2011, in part because of its inability to compete with Amazon and its slow acceptance of e-books.

Amazon has been disruptive and continues to be to this day. Its success can be attributed to a very well-designed digital process. In my opinion, Amazon’s digital experience is excellent.

Remember how concerned the banking industry was when Walmart applied for a charter in 2007? Bankers feared instant competition nationwide! While Walmart was not disruptive due to deploying new technology, it would have certainly been disruptive to banks due to scale.

Today, Amazon has surpassed Walmart in market capitalization. For the first time, online retail sales have surpassed in-store purchases. Amazon has been very successful in their fully-digital experience, as opposed to brick and mortar retail.

Digital can be a very effective delivery platform. Don’t forget that. I doubt if those formerly associated with Borders have forgotten the effects of digital.

In a previous blog (“Community Bankers are Customer Service Experts” – link below), I referred to analyzing your bank’s customer experience (CX) with your technology vendor. Now let’s consider your customers’ CX with your bank, or more importantly their digital experience with your bank. Why? Because fintech is digital and doesn’t need a physical location to provide service. Amazon doesn’t need a storefront in order to provide quality service. There is no question that fintech will compete digitally for your business, probably not all of it, but certainly a slice of it.

How does your bank stack up? There is a growing sector of customers (obviously millennials, but not just millennials) that seek out digital services first. I may even be in that category now. Fintech is digital. Fintech is disruptive. Both of these descriptions applied to Amazon 20 years ago.

Remember Cadabra, the company that I mentioned at the beginning of this blog? Cadabra eventually changed its name because it sounded too close to cadaver. It is now known as Amazon!

And Webvan, the internet-enabled grocery delivery company? It is recognized as one of the largest dot com failures the remnants of which are now owned by. . . Amazon! Coincidentally, Webvan was founded by Louis Borders long after he and his brother had sold Borders initially to Kmart (which of course felt the wrath of Amazon).

In Tech Transformers, a CNBC Special Report by Arjun Kharpal, it notes that Amazon dabbled in fintech with online payment solutions (Amazon Payments) with 23 million active users globally, up 150 percent from the prior year. On April 5, 2016, the company expressed interest in acquiring fintech startups as pricing for these companies became more attractive. (See “Amazon Mulls Fintech Acquisitions as Valuations Fall” article below) Who knows what this could mean?

Amazon is a shining example of how a digitally-inspired company can redefine a business sector. The digital revolution is redefining the banking industry. Your bank needs to follow fintech closely. See “Fintech – Friend or Foe?” blog link below for source subscriptions to consider.

In future blogs, I am going to review actual fintech offerings that may have engaged your customers with their services.

Community Bankers are Quality Service Experts Blog

Amazon Mulls Fintech Acquisitions Article

Fintech – Friend or Foe? Blog