“The sky is the limit,” he said.
While retailers like Walmart have failed in their attempts to enter the banking space after facing regulatory roadblocks, Amazon is using a collaborative approach. The company asked for conceptual pitches from Capital One, JP Morgan and several other banks last fall.
Collaboration “is the right way to go,” Stich said. “I suspect the feds will start sniffing around. However, if Amazon partners with a Wall Street bank with FDIC insurance and an RIA, that will be a clear advantage,” said Stich, who predicted Amazon could compete with, if not overtake, Overstock.com’s robo-advice product fairly quickly.
Overstock introduced its investment advice platform for $9.95 a month in January. The investment selection and management platform is powered by FusionIQ’s proprietary algorithm for scoring stocks and exchange-traded funds.
“This service introduces robo-advising investment management services to our millions of customers and continues Overstock’s commitment to bridging Wall Street and e-commerce,” said Patrick M. Byrne, Overstock’s founder and CEO, in January.
While there is no word yet on Amazon’s next move, both Capital One and JPMorgan have close relationships with the retailer. Capital One is one of the biggest users of Amazon’s cloud technology. JPMorgan has issued Amazon-branded credit cards since 2002 and both Amazon and JPMorgan are working with Berkshire Hathaway on a plan to create fairly priced group health care plans for their employees.