Google recently made an important announcement on the expansion of its digital banking platform. The company has joined hands with six more banks to offer savings accounts and digital checking to its Google Pay customers in the US. The offering is tentatively scheduled for next year.
New partners of the tech giants’ digital banking platform include names like Bank Mobile, BMO Harris, BBVA USA, Coastal Community Bank, SEFCU, and First Independence Bank. These financial institutions join Citi and SFCU (existing Google partners). So now, there is a total of eight banks queued for the project.
Similar to the mobile banking services made available by several start-ups, the tech giant has plans to offer the consumer-facing front-end to the digital banking services it makes available. At the same time, the accounts themselves will be held by the FDIC (Federal Deposit Insurance Corporation)-supported partner institutions.
News of Google’s big move into banking and personal finance through an initiative called “Project Cache” was first was reported by The Wall Street Journal.
Google, unlike other mobile banking start-ups that often mention their banking partners only in the fine print, has decided to offer banks with a co-branding experience. Additionally, the tech titan says that by working with an array of partners right from large, global banks to smaller credit unions with deep community ties will help the company do a better job, building products that meet dynamic customer needs.
The expert take
“We had confirmed earlier that we are exploring how we can partner with banks and credit unions in the US to offer digital bank accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account,” a Google spokesperson says. “We are excited that six new banks have signed up to offer digital checking and savings.”
More about the initiative
Google, in the digital era, successfully runs and manages its digital payments platform Google Pay along with Google Wallet to serve its customers. Today, as more and more consumers, mainly the younger lot, that tend to drift away from traditional banking institutions, prefer to manage their finances online.
Apple, the tech giant, already caters to the digital banking demands of consumers via its co-branded Apple Card credit card with Goldman Sachs. However, the company still does not offer a comprehensive banking service to its customers. It only offers Apple Cash, which is a service that helps customers store “cashback” availed from Apple Card use, payments from friends, or cash transferred from a connected bank.
Extensive efforts by Google showcase its concrete planning prowess. The company will not host the bank accounts; it will only draw on data and provide consumers with financial insights along with other budgetary tools.
The company says it plans to add even more US financial institutions over time. Additionally, for partners, the service allows them to promote their brand in the rapidly increasing mobile-first, online-only market.
“Being able to support our customers’ financial lives in more places where they’re spending their digital time is important to helping them be successful,” said Brett Pitts, Chief Digital Officer for BMO Financial Group, in a statement about BMO’s partnership with Google. “Collaborating to launch this new BMO digital product accelerates our ability to deliver financial advice to our customers and is an innovative step in the evolution of how we serve them.”
The partners’ take
For BBVA, the collaboration with Google is an additional step toward the BBVA Open Platform, which opens opportunities for the bank to acquire customers by embedding its financial products within other apps and services.
BBVA USA President and CEO Javier Rodriguez Soler stated, “BBVA has focused for decades on how it could use digital to advance the financial industry, and in so doing, create more and better opportunities for customers to manage their financial health.” He added, “Collaborations with companies like Google represent the future of banking.”
Several banks in their announcement mentioned that the accounts are expected to be launched in 2021; however, Google yet has not provided any official timeline for the launch.