Google to offer bank accounts in 2020
FinTech is a fascinating industry with seemingly new developments everyday. In the Middle East and North Africa (MENA), FinTech is among the most promising sectors for start-ups and SMEs, as investors and governments alike are growing increasingly interested in the sector. Accordingly, many initiatives have been launched to spur the industry further, including accelerators, sandboxes, investment funds, and more.
Not only that, corporations have taken note too, as they enter the foray through acquisitions of FinTech start-ups, as well as collaborations and launches of their own products. Take Apple, for example, which has recently launched Apple Card together with Goldman Sachs and Mastercard. Despite its recent complications, it has been an overall success.
This week, Google announced that it would start providing banking services, which is coming as soon as 2020. Dubbed “Google Cache”, the internet giant has partnered with banks and credit unions to provide checking accounts to its users, where banks will handle the financial and compliance services to all accounts. Partners include the likes of Citigroup and the Stanford Federal Credit Union, according to the Wall Street Journal (WSJ).
The move comes after the technology giants initially got their toes wet by launching their payment services – Apple Pay, Google Pay, Facebook Pay – and are now doubling down on the financial services industry.
Google will not put its own brand front and centre for the checking account. It will instead use the partner banks' brand.
With challenger banks popping up at a rapid pace across the developed world and receiving investment from reputable institutions, Google will face fierce competition from several angles – the traditional financial players, such as banks, as well as other technology companies such as Careem and Uber that are increasing their foothold in the finance space.
One advantage that Google does have, however, is the depth of data that the company possesses. As many of you have probably heard, data is one of the most valuable commodity in the world, and not without cause. The banking services that Google will be able to offer will be based on their knowledge of your preferences, dislikes, habits, and more, to provide you with the best customer experience.
Initially, Google and similar banking services will target digital-savvy consumers, which are often young digital natives who are more willing to try out online banking tools by tech giants. They’ll benefit from Google’s ability to work with large sets of data and turn those into value-add products if it chooses to do so.
The tech giant has said that it will not be using the data for advertising or selling it to others.
How willing are you as a consumer to try banking services by companies known for their large amounts of data? Will the personalised benefits be enough or will Google have to innovate to offer a disruptive service to stand out?