Tech companies seek to serve as quasi-financial intermediaries.

Amy Hamilton

2019-03-03 10:39:00 Sun ET

Tech companies seek to serve as quasi-financial intermediaries. Retail traders can list items for sale on eBay and then acquire these items economically on Amazon for direct shipments when busy buyers place orders on eBay. These retail traders serve as information arbitrageurs and so clip spreads between the divergent prices on Amazon and eBay. This online information arbitrage occurs often enough to be a viable business. From a practical perspective, this information arbitrage proves to be a valuable service at a market price.

Time is finite and human attention is precious so that the intermediary service often turns out to be worthwhile for better immediacy and convenience. In a similar vein, the online search website for real estate, Zillow Group, now attempts to serve as a quasi-financial intermediary for both home purchases and mortgage loans. Zillow brings back its co-founder and former CEO Richard Barton to lead this ambitious transformation. Zillow now transforms how Americans buy and sell their real estate properties as the tech platform uses both big data analysis and artificial intelligence to change how these residential owners and investors shop for homes with mouse clicks and satellite maps. Busy buyers pay for immediacy and convenience when they shop for homes on Zillow.

In addition to Amazon-eBay information arbitrage and Zillow real estate, Apple and Goldman Sachs enter into a strategic alliance to expand the credit card business. Apple pairs the new credit card with key iPhone features such as Face ID to better serve its active users. This credit card piggybacks on the Mastercard network and offers 2% cash rewards for most online purchases. Beyond cash bonuses, Apple and Goldman Sachs hope to leverage the Wallet app for tracking account balances and rewards for better personal finance management.

Like Goldman Sachs, big banks shift operational focus from their prior reliance on capital-intensive risk businesses to tech platforms for their tech-savvy clients. In light of financial distress and post-crisis regulation, big banks prefer to build online platforms for their key institutional clients to trade bonds, funds, and other complex securities. The banks accumulate fees and commissions when these transactions happen for the mutual benefits of both banks and institutional investors themselves. This fresh logic explains why Apple and Goldman Sachs can now work together to strengthen their credit card business. Nowadays Amazon-eBay arbitrageurs and tech titans such as Apple and Zillow seek to serve as quasi-financial intermediaries.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More
Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea.
Peter Prince

2018-04-13 14:42:00 Friday ET

Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea.

Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea with no regime change as the North Korean dicta

+See More
Warren Buffett approves Berkshire Hathaway to implement new meaningful stock repurchases.
Dan Rochefort

2018-11-15 12:35:00 Thursday ET

Warren Buffett approves Berkshire Hathaway to implement new meaningful stock repurchases.

Warren Buffett approves Berkshire Hathaway to implement new meaningful stock repurchases. Buffett sends a positive signal to the stock market with the Berks

+See More
The recent Bristol-Myers Squibb acquisition of American Celgene is the $90 billion biggest biotech deal in history.
Jacob Miramar

2019-01-10 17:31:00 Thursday ET

The recent Bristol-Myers Squibb acquisition of American Celgene is the $90 billion biggest biotech deal in history.

The recent Bristol-Myers Squibb acquisition of American Celgene is the $90 billion biggest biotech deal in history. The resultant biopharma goliath would be

+See More
Berkeley macro economist Brad DeLong sees no good reasons for an imminent economic recession with mass unemployment and even depression.
Laura Hermes

2019-11-21 11:34:00 Thursday ET

Berkeley macro economist Brad DeLong sees no good reasons for an imminent economic recession with mass unemployment and even depression.

Berkeley macro economist Brad DeLong sees no good reasons for an imminent economic recession with mass unemployment and even depression. The current U.S. ec

+See More
The Sino-American trade war may slash global GDP by $600 billion.
Monica McNeil

2019-06-15 10:28:00 Saturday ET

The Sino-American trade war may slash global GDP by $600 billion.

The Sino-American trade war may slash global GDP by $600 billion. If the Trump administration imposes tariffs on all the Chinese imports and China retaliate

+See More
President Donald Trump unveils the dramatic *tax overhaul proposal*.
Daisy Harvey

2017-04-13 10:42:00 Thursday ET

President Donald Trump unveils the dramatic *tax overhaul proposal*.

President Donald Trump unveils the dramatic *tax overhaul proposal*. Through this tax plan, Trump replaces the current 7 income tax brackets with 3 leane

+See More