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Is 2020 the Year Consumers Get Their Wish of Bank Account from a Big 4 Tech Company?

A recent survey showed just how willing consumers are to consider banking with Google, Amazon, Apple or Facebook.

February 26, 2020 By Ryan Lichtenwald Leave a Comment

Views: 272

The idea of Apple, Google, Amazon or Facebook getting into banking is not new. The possibility has been discussed for years with little to no information coming from the actual tech companies on when or if an offering would ever come to fruition. So far we’ve only seen ancillary products like the Apple Card, Google Pay or Amazon lending to their merchants.

American Banker recently reported that 64% of American adults would consider buying or applying for financial products from a tech company as opposed to a traditional bank or credit union. The Harris Poll, which surveyed 2,100 people found that users are willing to make the move despite reservations about information sharing at the companies. It is interesting that Americans have less trust for the tech companies and are concerned that they are not up front about how they use personal information, but potentially want to feed them with more data. In addition, 69% believe that tech companies are more likely to have a data breach than a traditional financial institution. It seems incredible the trade-offs some are willing to make, but points to just how unhappy some might be with their current providers.

What people are most interested in is a convenient product embedded with technology, something we would expect from any of the big tech companies today. The data skews as you would expect, with younger generations more likely to be interested in banking with a tech company, but still in the age range of 55-64, 52% said they would move to a tech company.  Six of ten people noted that they’d be willing to allow tech companies to use their spending data if it meant they would get better service like better security, protection against fraud or other rewards.

The data included in the survey brings up the question of whether most consumers are simply tired of their traditional bank or if they are just accustomed to big tech serving them well in so many other aspects of their lives.  As a millennial and someone familiar with all of the fintech offerings in the market today, I’d argue there is also a big gap of awareness of existing providers. Many would be better served by exploring some of the new offerings in the market today. I am less bullish on any initial offering from big tech being more compelling than what some other fintechs offer today.

A handful of fintechs have had massive success attracting users to their product, but banking relationships tend to be very sticky. I have experienced this firsthand. Having opened both accounts at Ally and Marcus, I still have multiple traditional bank accounts, one of which I first opened in high school. These old accounts are temporary storage for paychecks until I allocate funds elsewhere. Ron Shevlin recently called checking accounts “paycheck motels”. Shevlin argues that the checking account needs to be reimagined and from my perspective a simple checking account from any of the names in big tech simply isn’t compelling enough. Still, the mass marketing that would come from a launch may still benefit many since it is likely to be a better user experience than what many traditional banks offer.

So where do we stand today? Amazon was reportedly in talks back in 2018 with JP Morgan Chase on offering a checking account, but we have yet to see any further news. Late last year the Wall Street Journal reported that Google will soon offer checking accounts with their project with the code-name “Cache”. The partnership was rumored to be with Citi and a credit union at Stanford University. It will be interesting to see if the Google checking account reaches the market in 2020 as originally reported. With so many users already in the ecosystem of big tech firms I have no doubt that massive amounts of people will sign up for the first account offered. The digital banking space is already extremely competitive with big names continuing to launch in the US so it will be fascinating to see how it all plays out.

Filed Under: Fintech Tagged With: Amazon, Apple, banking, checking account, digital banking, Facebook, google

Views: 272

GAFA Will Have a Profound Impact on the Future of Finance

Google, Amazon, Facebook and Apple could well be the fintech leaders of tomorrow

November 1, 2017 By Peter Renton 3 Comments

Views: 520

One of the first posts I ever wrote on Lend Academy back in 2010 was about mulling the idea of Facebook becoming a bank. Of course, I didn’t mean a brick and mortar type of bank but a digital bank of some kind. Seven years later this has obviously not come to pass but tech behemoths like Facebook are showing more interest in financial services.

GAFA is an acronym for Google, Amazon, Facebook and Apple, the largest tech companies in the world. Historically, these companies had stayed out of finance for the most part but in recent years that has changed.

Google and Apple both have payments products that have gained some traction in this country. Google and Amazon have small business lending arms that are providing financing to their existing small business clients. Facebook has their popular Messenger program that is starting to attract new initiatives from both fintech startups and big banks.

I would add PayPal into the mix here as well. They are on a fantastic run lately and their core payments business continues to expand. They also have a successful small business lending operation but like Amazon and Google this is focused on extending credit to their existing customers. What would happen if these companies decided to expand their focus beyond their own customers and take on banks directly?

McKinsey Report on Banking

Last week McKinsey released their annual banking report and it has created quite a stir in banking circles. McKinsey argued that platform companies like Amazon are well positioned to challenge big banks: [Read more…]

Filed Under: Peer to Peer Lending Tagged With: Amazon, Ant Financial, Apple, Facebook, Financial Innovation Now, future technology, GAFA, google, Tencent

Views: 520

The Bank of Facebook – Are Bank Execs Worried?

March 11, 2011 By Peter Renton Leave a Comment

Views: 1

A post on Friendfeed earlier today was interesting. I wrote this blog post last year, Will Facebook Become a Peer to Peer Lender, about Facebook’s possible impact on peer to peer lending and now we have this short post from Thomas Power featured in the video below:

every bank in the world waking up to the imminent threat of Facebook peer to peer lending. I am now getting emails daily from around the world from worried bank execs…

Since the video was made in April last year Facebook has increased their membership base by a couple of hundred million people, give or take, so the possibility is even more tantalizing today. Of course, there are no signs of it happening any time soon. But the video is definitely worth a look.

Filed Under: Investing/Lending Tagged With: Facebook

Views: 1

Where to Go to Discuss Peer to Peer Lending

March 1, 2011 By Peter Renton 7 Comments

Views: 990

My last post here generated quite an in depth discussion among the readers of this blog. This got me thinking. Where else can people go to talk about peer to peer lending? Some companies such as CommunityLend in Canada have their own communities where you can discuss p2p lending. Zopa in the UK has an active forum with over 2,700 members, but in the US while Prosper used to have a discussion forum they closed it down several years ago and Lending Club offers no such platform.

Online Forums

There are two active online community forums where people can go to discuss any aspect of peer to peer lending. They are:

1. Prospers.Org – has the largest community of people interested in peer to peer lending at around 4,700 members as of this writing. It is a very active community with over 23,000 topics being discussed and more being added every day. One word of warning, though, before you go there. There are many people on this site who lost money in the early days of p2p lending and they have quite negative opinions about Prosper and to a lesser extent Lending Club. Having said that there are some incredibly smart people on the site who remain active investors and if you ignore the negative vitriol you can can learn a great deal. There are many categories on the forum, I focus on just four: General Prosper Chat, Prosper Lenders – General, General Lending Club Chat and LC Lenders. [Read more…]

Filed Under: Social Lending 101 Tagged With: Facebook, forums, Prospers.org, Wiseclerk, Zopa

Views: 990

Will Facebook Become a Peer to Peer Lender?

November 17, 2010 By Peter Renton 3 Comments

Views: 63

I just saw this fascinating video that brought up a question I must admit I have never contemplated – will Facebook become a bank? Of course, Facebook will never become another Bank of America with thousands branches, but they could become a Bank 2.0 type bank. The heart of such a “bank” would likely be peer to peer lending.

Peer to peer lending is such a new industry we are still in the wild west days with few of the players anywhere in the world making money. Yet. I always thought that if Lending Club or Prosper really got going and started to eat away at traditional banking loan volume, then one of these banks would snap up these leading social lenders. [Read more…]

Filed Under: Future Trends Tagged With: Bank 2.0, borrowing, Facebook, lending

Views: 63

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ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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