Lisa Abramowicz is a Bloomberg Gadfly columnist covering the debt markets. She has written about debt markets for Bloomberg News since 2010. Inc. has profoundly changed the way clothes and books are sold and is now targeting food shopping. Its next project may very well be taking on the heart of Wall Street.

The technology giant has had several conversations with banking regulators over the past two years on a wide range of topics, including "financial innovation," according to lobbying disclosures reviewed by American Banker. It already has a lending operation that it started in 2011 to support merchants that sell on its marketplace. This unit has grown increasingly popular, to the point where it originated $1 billion in loans over 12 months.

Meanwhile, new U.S. banking regulators seem more willing to entertain the idea of granting banking charters to nontraditional firms, opening them up for more business that was once reserved for traditional financial centers. For example, the acting comptroller of the currency, Keith Noreika, spoke at an Online Lending Policy Summit in Washington in late September and talked broadly about supporting financial innovation, particularly as it related to nontraditional firms.

Shrinking Pool
The number of commercial banks in the U.S. has declined over the years
Source: Federal Financial Institutions Examination Council

"I see the growth of online lending and marketplace lenders as the natural evolution of banking itself," he said. "Too often regulatory burden gets in the way of economic opportunity."

While the conversation seemed to be geared at firms such as Social Finance Inc. and Lending Club, it evolved quickly into talking about big technology firms and how their roles could evolve in finance. This is not a new idea but one that has taken a greater degree of immediacy with the new administration. The online-based firms that most people associate with peer-to-peer lending don’t have a ton of capital and have been challenged by leadership and credit issues. They could certainly demonstrate a new way of doing business for big banks, but they hardly pose a real and imminent challenge to Wall Street.

Upstart Crew
While U.S. online lenders have generated a lot of attention, they're not major credit providers
Source: S&P Global Market Intelligence

Big Tech is different. If an Amazon or Alphabet, Google’s parent company, really wanted to create an online lending platform, or securities-trading system, they could present some serious competition to the existing finance players.

"Amazon has very broad ambitions," said Ram Ahluwalia, founder of PeerIQ, a startup that tracks loans originated on online systems. He attended the online lending meeting last month and noted that many people were talking about big technology firms plowing more into financial services, including regulators.

Amazon is not alone. Others, such as PayPal and Google, have also entertained banking ideas. In fact, they’ve joined forces, creating a lobbying group called "Financial Innovation" together, according to American Banker.

Amazon, however, is uniquely positioned to transform the notion of Wall Street, especially as the tech giant collects data on its users and amasses an ever growing audience. It could rethink the way basic processes are done, shrink costs further and quickly generate a critical mass of trading activity on electronic platforms. The tech giant has been known to sacrifice bigger margins to win business with the lowest prices, and this would work tremendously well in finance.

In this way, Big Tech in the U.S. would be taking a page from China, where Alibaba and Tencent Holdings have already become big lenders, using their client data to their advantage.

Wall Street hasn't truly faced a threat from a digital disruptor yet. It has reason to fear Amazon.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Lisa Abramowicz in New York at

To contact the editor responsible for this story:
Daniel Niemi at