Did Amazon Miss the Window to Launch a Checking Account?
Back in March, the Wall Street Journal reported that Amazon was in talks with a number of big banks, including JPMorgan Chase, about building a checking-account-like product. According to the article:
"The effort is still in its early stages and may not come to fruition. The talks with financial firms are focused on creating a product that would appeal to younger customers and those without bank accounts. Whatever its final form, the initiative wouldn’t involve Amazon becoming a bank."
Eight months later, and we haven't heard any new news. Based on new Cornerstone Advisors research, we have to wonder: Is Amazon too late?
In Q3 2017, Cornerstone Advisors surveyed US consumers between the ages of 21 and 72 who own a smartphone and have a bank account, and asked respondents what they would do if Amazon: 1) Offered a free checking account, or 2) Offered a checking account bundled with other services like cell phone damage protection, ID theft protection, and roadside assistance, for a fee of $5 to $10 a month.
In Q3 2018, we surveyed a similar population of consumers and asked the same questions. The differences year over year may be surprising. The percentage of Millennials--both Younger ones in their 20s, and Older ones in their 30s--interested in opening a checking account from Amazon declined between 2017 and 2018.
Even among Amazon Prime customers, the percentage of Millennials interested in a bundled account from Amazon declined.
Just as surprising (to me, at least) was the huge jump in interest among Gen Xers, both overall and among Prime customers.
What's going on here? One theory: The Amazon Novelty Factor has worn off among Millennials. When we surveyed consumers back in 2017, there had been no announcements about Amazon offering a checking account (nor, to toot our own horn, any surveys asking consumers about their interest in an Amazon checking account).
Since a year ago, however, there have been numerous press stories about Amazon getting into banking, and other researchers, ahem, following our lead in asking consumers about their interest.
Just a theory--interested in hearing your thoughts on the change in interest.
Director of Research