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Google is the latest tech giant to announce its banking plan



  Google CEO Sundar Pichai copyright copyright
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Google expands financial offerings

Google has become the latest tech giant to announce a new financial product for users ̵

1; at this time, current accounts.

The firm says it plans to partner with banks and credit unions in the US to offer a "smart review"

It said the service, which will be launched through Google Pay, will allow users to add of Google's analytic tools on traditional banking products.

The step follows the offerings of credit cards, payment systems and loans of Facebook, Uber, The Apple and Amazon.

While products and repairs are different, tech giants entering the world of banking share one very important motive: doing what they need, says Gerard du Toit, a partner at the Bain & Co consulting firm.

"They are all competing for the attention of consumers and for their ecosystem and platform to win," he said.

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Facebook says its payment tool is a natural extension of its broader purpose of connecting people

Amazon's credit card and business loans aim to boost e-commerce business, while Uber Money provides credit cards, debit accounts and money tracking tools to deliver company taxi operations .

Facebook says its Facebook Pay service will complement its messaging tools.

And both Google and Apple, partnering with Goldman Sachs' new consumer arm, Marcus, on a credit card as part of its Apple Pay and Wallet service, which wants to make iPhones and Androids valuable.

Walking through financial services will also provide information on Google and Facebook for their advertising business, helping keep track of what ads are leading to purchases, Mr. du Toit said.

Banking moves are likely to add to the debates among tech giants, who face trials related to competition, data protection and privacy.

Some officials have expressed concern about financial management gaps as growing activity occurs outside of traditional banking. And in recent days, New York has announced that it will investigate Apple, following accusations that the credit card relies on "sexist" algorithms.

Mr du Toit said regulatory concerns represented a "fly in the soup" for tech firms.

"They need to be careful," he said.

Collaborations

In many cases, tech companies are working with traditional banks – a sign that they are aware of potential issues, he said.

Google stated that its US partners, allegedly with Citigroup, will begin offering accounts by 2020.

"We believe in Our regulation and knowledge of partners is how a is a great complement to our experience in developing useful tools and technologies for our users, ”it said in a statement.

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Chinese tech giants have had success in financial services

Lagging China

Amazon has been offering small business loans since 2011 and launched its credit card with JP Morgan Chase in 2017.

But in some ways, the irony of the announcements of companies this year, is a sign that the US is late to the party.

In China and several other countries, tech firms have moved quickly to banking, fueled by the need to fill the gaps left by the financial industry that create barriers for their businesses, even they are e-commerce firms or food delivery companies.

In the United States, however, demand has been less pressing, thanks in part to the ubiquity of credit cards and other "good enough solutions", Mr. du Toit said.

Big tech payment services provided by the likes of Alibaba's Ant Financial and Tencent account accounts for nearly 16% of China's GDP, compared to less than 1% in the US, according to at Bank for International Settlement, an organization supported by 60 of the world's central banks.

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Tech companies "are more accepting now because they believe they can offer a better material solution to customers," he said.

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Last month, Facebook chief executive Mark Zuckerberg dismissed China's competition threat while defending his firm's interest in having a cryptocurrency before Congress last year. months. [19659007] "I view the US financial infrastructure as obsolete," he said.

& # 39; Darwinian experiment & # 39;

As tech companies begin to leverage their massive reach, close customer relationships and giant data sets, banks "wake up" to the threat, leading to partnerships and other non-profits. "frenemy" fixes, Mr. du Toit said. pressures or acquisitions of ogy companies, Mr. du Toit said.

"I have sometimes described it as a giant Darwinian experiment of different banks and big tech couplets," he said. "There will be some mutations that will succeed and others that will fail."

While Google's earlier efforts to develop Google Pay failed to gain much traction in the US, the firm has developed significant payments business in India, where a Bain & Co survey found that half of respondents have used the platform in the last 12 months.

"I cannot count them," Mr du Toit said.


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