Google recently expanded its Google Pay program to include checking accounts, marking a major step in the direction of financial services. Whether the tech giant is to succeed in this endeavor remains to be seen, but banks and credit unions should make note of this major shift in business strategy from one of the biggest players in the tech world.
Google Isn’t a Bank
Perhaps most obviously, Google itself isn’t a bank. Instead, it has chosen to partner with other major financial players, most notably, Citi, in order to leverage Citi’s status as a financial powerhouse as the backing for Google’s Google Pay mobile wallet. Expanding on its ability to conduct transactions through Google Pay, the tech giant will offer things like checking accounts all conducted within its interface.
On one hand, this transition is somewhat predictable and expected as a natural evolution to take another step into the financial realm. On the other hand, it’s a major transition that financial institutions should make note of. This move will likely see Google continue to push into financial services, given that this experiment is successful.
Big Tech Sees FinTech as an Opportunity
Throughout 2019, one of the hottest topics and transitions in the banking world has been the push for FinTech organizations to partner with banks. FinTech organizations provide useful interfaces and ways to make use of customer data in a form that delights them, helps with customer retention and gives financial institution a competitive edge in digital customer experience. In return, FinTech organizations gain the security, reputation, legal compliance and existing customer base their partnering financial institutions already have.
Google sees this relationship in the same light. In partnering with Citi, Google is convinced that it can bring a unique value to customers that financial services organizations, even ones as big and sophisticated as Citi, currently lack.
Other Players May Follow
In this year, we’ve already seen Facebook announce its Cryptocurrency Libra, Apple announce the Apple Card, and now Google offer checking accounts through Google Pay. These big tech organizations have seen their reach and influence grow exponentially in the last decade, and their expectation with this move into financial services is to take the same influence and customer experience they’ve mastered, and apply it to a major industry continuing to evolve. Stay tuned, this trend likely isn’t going anywhere.
Customer Centricity Is More Important Than Ever
Perhaps most importantly, your financial institution needs to focus on customer centricity. Making financial services easy, intuitive and rewarding should be your organization’s key goals going into 2020. Big tech can be intimidating as a new player in the financial services space, but thinking of technology as the means to delighting customers will help your organization thrive during this period of transition. Be sure to focus on your digital touchpoints, eliminate red tape to working with your organization, and watch your revenue grow.