If you thought companies like American Express, Goldman Sachs, and JPMorgan Chase were behind the digital curve, think again. These three companies are 175, 156, and 154 years old, respectively, but they're all part of the digital technology revolution. They're competitive with the newest and most innovative fintech companies, but they come with the stability of more than a century of financial management.
I want to focus on American Express, which has carved out a niche in its differentiated credit card network and banking model, and is as fresh as ever.
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Capturing a young generation of users
American Express is a lot more than the credit card network of yesteryear. It has gone through several iterations over its nearly two centuries of operation, and today it has a robust credit card model with a strong moat as well as a digital banking business.
It's growing quickly among the youngest users, who are driving growth today and should for the foreseeable future. Spending by Gen-Z users increased 39% over last year in the second quarter, far outpacing total growth of 7%.
American Express is attracting them through a large network of perks and digital capabilities, such as its popular Resy restaurant reservation app and new digital travel tool called AmEx Passport that saves "stamps" on a blockchain network. It recently announced a new project in partnership with back-end management restaurant company Toast to integrate Resy users' preferences into its software. These are the kinds of premium and digital experiences that attract American Express' affluent clientele.
Combined with its decades of data and building its brand, American Express has an edge over start-ups in this space.
