The “Amazon Effect” extends far beyond retail, reshaping customer expectations across industries—including banking. Consumers accustomed to Amazon’s fast, intuitive, and frictionless shopping experience increasingly expect the same simplicity when opening accounts, applying for loans, or managing finances online. As fintech competition intensifies, financial institutions are investing heavily in digital onboarding and mobile experiences to deliver the seamless interactions customers now consider standard.
The Amazon Effect crosses continents and reaches Australia’s banks. As the following article describes, Amazon’s ubiquitous e-commerce presence and widespread portfolio has increased customer expectations of their product and service providers.
Such is the impact of Amazon that it is even affecting what people expect from their bank. That’s the view of the chief executive of fintech firm Avoka, Phil Copeland, who said the user experience provided by the shopping giant has fed into an expectation among consumers that you should be able to sign up for products easily and simply online.
With banks also nervously eyeing fintech competitors, the dynamic is forcing banks to sharpen their focus on “digital customer acquisition”, or online sales.
“Amazon has really changed the landscape a lot, for a lot of people. There’s an expectation that if it’s not as easy as doing business with Amazon, then what are you doing wrong?” Mr. Copeland said.
In response to these pressures, banks are overhauling their systems to offer all manner of products, for both retail and business customers, on mobile and digital devices. Mr. Copeland’s Avoka is seeing the demand first hand, as a software firm that specializes in helping big banks with “customer on-boarding”.
A recent report from Avoka, which has clients including Westpac, Bankwest, Macquarie Group, CUA, Citi and HSBC, said Australian lenders were more advanced in digital sales than European and United States banks. The report found 49 per cent of personal banking products could be opened on a mobile device in Australia, but a much lower share of small business products were available on a smart phone.
Amid the wave of fintech firms eyeing banks’ profits, the domestic banks have invested heavily in selling their products through mobile banking, with National Australia Bank’s UBank last year citing strong growth in the number of people taking out a home loan through a phone.
ANZ Bank also said its agreement to provide Apple Pay has helped its product sales, including in homes loans. Australian bankers have also acknowledged the impact online giants are having in all manner of industries.
The good news for Australia banks is that they are quick to react in emulating Amazon’s typically smooth and seamless buying process. The banking industry realizes that customers expect more than just account access from digital platforms, especially mobile. Key drivers for mobile use include providing an integrated set of services that cement customer relationships, including payment enablement, loyalty, customized marketing, and partner programs. In contrast, Android, Apple, and Samsung Pay have learned that mobile use has to be about more than just one function, which is why their user adoption has lagged expectations. For the most part, Amazon gets it, and those vertical markets that choose to pattern their own processes after them should be ahead of the curve.
Amazon’s influence demonstrates that customer expectations are no longer defined by industry boundaries. Financial institutions that embrace digital onboarding, mobile-first experiences, and integrated services will be better positioned to compete for customer loyalty. The Amazon Effect has become a benchmark for digital customer experience, challenging banks to continually simplify interactions while delivering value beyond basic account access.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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