Bank of America Corp (NYSE:BAC) stock is up 12% year-to-date and more than 45% since Nov. 8 — the day voters chose Donald Trump as the next U.S. president. Financials including BAC stock have benefited greatly from Trump’s election, as evidenced by the Financial Select Sector SPDR Fund (NYSEARCA:XLF), which is up 25% since then.

The market expects the new administration to give the banks some regulatory relief. On the campaign trail, Trump railed against Dodd-Frank, the 2010 law requiring banks to hold more capital.

See, Trump wants faster economic growth, and as a result, he’s likely to deregulate the industry, which among other things would allow banks to take more risks with their balance sheets. And if banks move more of their money into higher-yielding, riskier assets, their profits should go up.

Trump’s Treasury Department released its deregulation plan last month, making analysts more bullish on bank stocks. Also, BAC stock and the rest of the sector has been lifted by a few factors, including recent stress-test results and optimism over rising interest rates.

But I don’t quite agree with this latter driver, and I think there are other headwinds in store, including — of all things — Amazon.com, Inc. (NASDAQ:AMZN).

Let me explain.

Rising Rates: Not the Catalyst We Expected

Some see Bank of America stock as a “buy” because of rising interest rates.

The Federal Reserve has already raised interest rates twice this year and wants to begin winding down its balance sheet. This means selling some of the bonds it has accumulated over the years, which should reduce the money supply and push interest rates up.

However, analyst Richard Bove, who focuses on bank stocks, does not see rising rates as bullish for banks, and in fact advises investors to steer clear of the sector. And I agree.

And as I mentioned in my article about Ford Motor Company (NYSE:F) a few weeks ago, today’s interest rates are low by historical standards. Interest rates move in long-term cycles, and fell for three decades after 1981. But declining interest rates appear to be a thing of the past.

When interest rates go up, investors tend to drive BAC stock and other players higher because the banks can make new loans at higher rates, which should increase profits. However, the relationship between interest rates and bank profits is actually more complicated.

Interest rates have an inverse relationship with bond prices, and rising interest rates lower the value of a bank’s loan book and bond portfolio. They also could trigger defaults among borrowers.

Oppenheimer & Co. analyst Chris Kotowski wrote a report on the topic in 2013, stating that “the relationship between bank stocks and rates is anything but straightforward.”

Also, higher interest rates will affect the broader market as well, not just bank stocks. Higher rates should mean higher earnings yields. This means stocks could trade at lower multiples, and valuations would be pushed downward.

New Competitors for Banks?

Bank profits don’t really depend on how high or low interest rates are. Instead, they’re based on the difference between the rate which banks pay depositors and the rate at which they lend money to borrowers. This is called the spread, or net interest margin.

The higher this margin, the greater the bank’s profits.

Last year, I described the future impact of fintech on Bank of America stock. China appears to be on the cutting edge of financial innovation, and tech companies like Tencent Holdings Ltd (OTCMKTS:TCEHY) and Alibaba Group Holding Ltd (NYSE:BABA) play a major role in payments and lending there.

The course this takes in the U.S. won’t be exactly the same, but I think there’s a good chance that Amazon will play a similar role in America in five years’ time. Expect the impact on Bank of America to be negative; AMZN shook up the country’s retail and will probably impact banking in a similar fashion.

Alibaba has already done so in China. BABA operates a marketplace which connects buyers to sellers, just like Amazon. As I mentioned last year, it also connects borrowers and lenders through its P2P lending service.

And Alipay users can put their cash balances on Yuebao, a money market fund which is now the world’s biggest. Yuebao offered depositors higher rates than Chinese banks, whose deposit rates were set at artificially low levels by the government to boost their profits.

Since savers in China had few places to store their wealth other than bank accounts until a few years ago, the banks could get away with paying them low interest rates.  But then Yuebao came along. Yuebao lent out money from its users to banks at higher rates on the interbank market, and this reduced net interest margins at Chinese banks.

U.S.banks have long been allowed to compete with each other by offering higher deposit rates, so the impact probably won’t be as severe. But as I mentioned in March, their lack of branches gives fintech lenders a 400-basis-point cost advantage over banks.

Like Uber does with car rides and Airbnb does with rooms, online marketplaces like Amazon could connect borrowers and lenders directly. This cuts the banks out of the process.

Bottom Line on BAC Stock

Past experience shows us that having Amazon enter your industry is generally not a good thing. Low margins won’t deter Jeff Bezos from entering a new industry, especially one so connected with commerce and payments.

Amazon has disrupted retail, and banks like Bank of America could be next.

Both sides should look at China’s experience. Amazon could copy Alibaba’s playbook, while Bank of America could look at how Chinese banks defended themselves. 

As Citi states in its report, “The successes of China’s Internet giants in financial services may provide a road map” for U.S. tech giants like Alphabet Inc (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB).

The report also notes that finance is more important to Amazon than to Alphabet, Apple or Facebook.

Amazon seems to be the most likely entrant into financial services. Alex Rampell, a partner at the venture capitalist firm Andreessen Horowitz, noted this in February. James Lloyd, Ernst & Young’s fintech leader for the Asia-Pacific region, thinks Amazon will play a greater role in payments, lending and credit scoring, just like BABA in China.  

This means more competition for Bank of America, and more of a ceiling on BAC stock.

As of writing, Lucas Hahn did not hold a position in any of the aforementioned securities.