Inc. (AMZN) has a thing for getting into new markets, much to the expense of traditional industry players across segments such as healthcare, retail groceries and entertainment. As the Seattle-based retail behemoth continues to leverage its economics of scale, low costs and cutting-edge technology to steamroll its rivals, Amazon could easily rise as a leader in the financial sector to become on par with Wells Fargo Corp. (WFC), the third-largest bank in the United States, according to one team of bulls on the Street, and as reported by CNBC. (For more, see also: Amazon V. Google: Smart Home War Escalates.)

The Facts

Bain & Company released a note on Wednesday indicating that Amazon could take on America's most powerful corporations in as little as five years, thanks to its digital dominance and widespread consumer base. Bain's Gerard du Toit and Aaron Cheris foresee Amazon's banking service booming to serve over 70 million U.S. consumer relationships by 2023, posing a larger threat to the current industry order than "nimble fintech startups," which are often targeted as the likely disrupters. Amazon shares have skyrocketed 82.5% over the most recent 12 months, reflected in a market capitalization of $744.4 billion, compared to struggling Wells' 3.1% decline over the same period and $278.4 billion market value. By comparison, JPMorgan Chase & Co. (JPM) has seen its stock gain 25.6% to reach a $395.2 billion market cap, while Citigroup Inc. (C) stock has increased 22.2% to reflect an $190.3 billion market value over the past year. 

Co-branded banking could save the established tech titan over $250 million in credit card interchange fees annually, according to the consulting firm's report, given Amazon inks a deal with a bank partner, such as JPMorgan, on checking accounts. 

To be sure, other analyst say Amazon's move into financial services might be much more targeted and narrow than that described by Bain. A recent report by bulls at Bank of America Merrill Lynch suggests that, in a broader attempt to boost e-commerce sales, "Amazon's primary motivation would be to attract younger and under-banked customers that otherwise would find it difficult to shop online." While Bank of America noted that there may be some ability for the company to reduce fees it pays to financial institutions via a "closed-loop prepaid debit card type of product," the real benefit of such an offering would be tighter customer lock in and higher long-term retail sales, as reported by a CNBC story published on Mar. 6.

Nonetheless, Bain and others on the Street see a potentially much larger Amazon banking franchise to come as the company uses its digital prowess and massive reach to quickly enter new markets and squeeze out its competitors. (For more, see also: Why Amazon's Stock Will Rise 15% Even Amid Grocery Price Wars.)

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