Global brands from Mercedes and Amazon.com Inc (NASDAQ: AMZN) to IKEA and Walmart Inc (NYSE: WMT) are migrating to software from tech startups from banking and credit to insurance services at the cost of the traditional lenders, banks, and financial institutions, Reuters reports.
The trend will worsen for the lenders by further pushing them away from the finance chain and data trove, the key to client preferences and behavior.
Some upstarts have procured licenses for regulated services like lending; they lack the scale and deep funding pools.
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Walmart launched a fintech startup with investment firm Ribbit Capital, while IKEA acquired a minority stake in BNPL firm Jifiti.
Automakers like Volkswagen AG's (OTC: VWAGY) Audi and Tata Motors Ltd's (NYSE: TTM) Jaguar Land Rover have tried embedding payment technology in their vehicles besides Daimler AG's (OTC: DMLRY) Mercedes.
Shopify Inc (NYSE: SHOP), valued at $184 billion, has provided $2.3 billion in loans and usually reaches out to merchants to cater to their needs.
However, JPMorgan Chase & Co (NYSE: JPM) had a consumer and community loan book worth $435 billion at June end.
Interestingly, the Bank for International Settlements warned watchdogs to control the growing influence of fintech firms.
Still, Citigroup Inc (NYSE: C) collaborated with Google on bank accounts, Goldman Sachs Group Inc (NYSE: GS) is offering credit cards for Apple Inc (NASDAQ: AAPL), and JPMorgan is acquiring 75% of Volkswagen's payments business.
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