Hurray, banks have competition. No, not the shady money lenders, but technology enables lenders that are not banks.
And Alibaba is the new dragon from dragon-land that challenges banks.
Alibaba is the Chinese equivalent of e-Bay. But it allows customers to have a virtual wallet, have digital cash and allows them to transfer funds to their friends. It also has a Money Market account and allows customers to invest. Customers can also perform inter-bank transactions. So the banks are worried.
Have you noticed that Amazon provides suggestions in Google search even as you start typing a books’ name ? That, strictly, is intrusion. But we don’t protest.
‘When you allow Amazon to be intrusive and allow it to “suggest” products based on customer behavior, you need to allow banks to “suggest” their products to customer when they use these e-payment services’, say the banks.
‘I will lose my profit. I have to maintain a higher capital adequacy ratio but not Alibaba’, protest the banks. but they take care not to sound as a protest. Can’t afford to scratch Beijing at the wrong end, right ?
Looks interesting when banks are left to fend for themselves. Remember the ‘Lehman millionaires’?
Alibaba of yore had 40 thieves. Now there are banks.