Amazon has been engaging with banking regulators over the past two years and is rumored to be considering starting a consumer lending arm. The e-commerce giant has already began offering loans to merchants that sell on its marketplace, and has originated over $1 billion in loans over the last 12 months.
While the conversation seemed to be geared at firms such as Social Finance Inc. and Lending Club, it evolved quickly into talking about big technology firms and how their roles could evolve in finance. This is not a new idea but one that has taken a greater degree of immediacy with the new administration. The online-based firms that most people associate with peer-to-peer lending don’t have a ton of capital and have been challenged by leadership and credit issues. They could certainly demonstrate a new way of doing business for big banks, but they hardly pose a real and imminent challenge to Wall Street. Big Tech is different. If an Amazon or Alphabet, Google’s parent company, really wanted to create an online lending platform, or securities-trading system, they could present some serious competition to the existing finance players.