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GAFA – Retailification of Banking

April 26, 2018 - Vishnudatta Harihara Keshavamurthy Product Manager, Infosys Finacle

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GAFA, the four most famous (notorious?) internet based tech giants of the world – Google, Apple, Facebook and Amazon – are now synonymous with disruption of traditional business models.
The impact of the GAFA business model is industry agnostic, which is what makes it so special, and hard to ignore. Every entity, from FMCG companies to aggregators, manufacturers and even governments, (am not referring to the recent data breach by FB!) has been affected and has embraced GAFA in some way or the other. If nothing else, GAFA appears in the first slide of any corporate strategy presentation; such is the impact of these companies.
There are enough reams of paper and data on how these companies became what they are today, hence this post will not say more on that. Instead it will focus on the impact of Google and Amazon, without whom it is hard to imagine getting through a day in our lives (not just the online store, think AWS too!).

The experience:

Google is about connecting our world, providing insights on what works best for us (though it means reading our mails!) and influencing our decision making ability with its search engine optimization business approach. Right from managing our calendars first thing in the morning, to predicting the weather, mapping our routes, and booking our cabs, Google does everything to help us be more productive at work. It also helps us find things to eat and places to eat them, check movie reviews, book tickets, plan vacations, research doctors and what not! Essentially, Google is all over the place in the urban lifestyle.
Now, on to Amazon, which by virtue of its experience, has become the default store for buying anything from A to Z (or even when we don’t need to buy anything!). Amazon has actually flattened the world and completely changed the very experience of how we shop. Billions of dollars’ worth of sales take place in a single day thanks to Amazon’s large scale marketing, unheard of discounts, and ease of ordering.
Let us look at two other digital revolutions that have swept the whole of India and made waves worldwide – Reliance Jio and Paytm. Jio, in a matter of 3-4 months, made India the largest consumer of internet data in the world, at 1/10th the price, and ushered in a digital revolution with a ripple effect.
Paytm, on the other hand, revolutionized how Indians pay (not just the urban population, even villagers) achieving what even the largest telecom players could not do through their mobile wallets. Paytm now is a payments bank, has an online mall, offers most ticketing services, and “cashback” to boot.

Impact:

Google’s quality of experience has taught customers to demand the same from other providers, including banks. Customers expect consistent experience, aggregation of their financial footprint, the right information when needed, and help with decision-making. Open banking is an offshoot of this expectation, ironic, considering that Google is often criticized for killing competition.
Amazon and Paytm’s experiences have led to the creation of online marketplaces even for financial needs – insurance,  loan, credit card etc. – and expectations of a similar online shopping experience among customers.
This is what I would like to call “retailification in banking”- customers demanding a GAFA or Paytm kind of experience in banking too. I visualize banking becoming part of our lifestyle, embedded in all our transactions, staying in the background, like Google, and only becoming visible where required (like Amazon, when it helps me buy what I want, when and how I want it, and with adequate discounts!)

Future, extreme:

Extending the thought of retailification in banking to retailification of banking, in future would we really need banks to serve retail customers, or can GAFA and Paytm do that as well?
Can banks then concentrate only on large corporate clients, even as SME business requirements are mostly met by GAFA? I would like to think not.  I would rather see banks embracing the change soon and evolving into GAFA-type entities while retaining their essence.

Vishnudatta Harihara Keshavamurthy

Product Manager, Infosys Finacle

A passionate product management professional, an intrapreneur at heart. Key interests: Studying M&A, agriculture and F1 racing.

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