Digital services


The startup N5 Now warns that these large companies could take the lead in the financial sector.

The fintech N5 Now analyzes the aspects that could give the lead to Big Tech in financial services.

From its inception, companies like Google, Facebook, Apple, and Amazon focused their attention on improving their core technology services. However, a few years ago they decided to venture into the world of finance with groups such as Goldman Sachs, J.P. Morgan Chase or the Citigroup. Today 11.4% of its income derives from this sector.

Although all offer the payment service through virtual wallets, there is no reason to believe that the technological giants will not expand their portfolios of services offered.


In this sense, the Fintech N5 Now, recognized by Microsoft as the “Latin American Startup of the Year”, analyzes the aspects that could give the lead to Big Tech in this area and turn them into a competition for banks.


The main advantage that companies such as Google, Facebook, Apple or Amazon have is not only their great knowledge of the technology industry, but also their enormous capital that allows them to venture into various fields and finance themselves without much difficulty. But, mainly, they enjoy the trust of consumers. “In a survey conducted in 29 countries, 54% say they trust these companies more than banks. In countries like India or Italy this number exceeds 70% ”, explains Julián Colombo, CEO of N5 Now.


Another of the qualities that could give them an advantage over their competitors is their global reach compared to the big players in the financial sector. “It is enough to compare the 2,700 million users that Facebook or the more than 2,000 million Google have with the 840 million users of the Agricultural Bank of China or the 660 million of the ICBC to understand that the competitive advantage is enormous”, details the economist with More than 20 years of experience in the industry If they wanted to advance in the financial world, they would end up competing at the same level with other multinationals in their sector since traditional banks could not cope with them.


At the same time, these companies are also known for handling and controlling large amounts of data coming from their users. This information allows them to generate actions or offer services tailored to the client. “From e-commerce platforms, for example, it is possible to deduce through the information that consumption and payment patterns are handled, which is very useful to be able to offer credits”, Colombo exemplifies. Regarding social network companies and search services, the manager believes that with the information they collect from their users they will be able to “predict prices and products more adapted to the needs of their consumers.”


Finally, Colombo points out another point that puts Big Tech a step forward: its regulation. This is due to the fact that, on the one hand, these companies have a presence in different countries, so it is difficult to apply a regulation by jurisdiction “especially in emerging economies where generating an appropriate legislation implies investment of resources.”


And, on the other hand, that they handle different activities that further complicates the application of a legislation since it must consider the multiplicity of services they offer. “As a result of its diversification of activities, it is possible that there are gaps and asymmetries in the regulations, something that does not happen with other industries such as finance.”
Until now, the foray into the financial sector of multinationals such as Facebook, Amazon, Google or Apple occurred in a moderate way, but according to the economist, their footsteps should be closely followed due to the high brand recognition they enjoy, due to their great power of market and by the amount of data and information that they manage and control of the users to world-wide level. “The moment they decide to increase their participation in this sector, they could become the biggest competitor that the bank has had so far”, highlights the manager.


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