Google links with eight US banks for current accounts
Tech giant works with banks to layer digital services on top of secure and regulated banking infrastructures
Google’s banking strategy continues to evolve through a deal with eight US banks that will see accounts delivered through Google Pay sitting on top of the established infrastructure of the banks.
The mobile first current accounts will offer customers the functionality they demand from modern digital bank accounts through Google, with the security and regulated engine from the bank underneath.
The accounts, expected to launch next year, will be co-branded between the banks and Google. The eight banks include BBVA USA, BMO Financial Group, First Independence Bank and SEFCU.
The new platform will pair Google’s expertise in creating intuitive user experiences with the security of reputable banks to provide a new way for customers to manage their money with financial insights and budgeting tools.
Felix Lin, vice-president of payments ecosystems at Google, said: “We believe we can use our technology expertise to benefit users, banks and the entire financial ecosystem.”
In November last year, Google said it was working with Citigroup and Stanford Federal Credit Union on a project known as Cache, which could see current accounts, known in the US as checking accounts, available next year.
By working with existing banks that have already jumped through all the regulatory hoops, Google can avoid huge costs.
At the time, Google executive Caesar Sengupta told the Wall Street Journal: “Our approach is going to be to partner deeply with banks and the financial system. It may be the slightly longer path, but it’s more sustainable.”
Read more about Google Bank theory
- Like Uber, Google has become a default name for digital disruption in industries. But Google, the internet giant, has even been talked of as a potential bank.
- Consumers in Europe increasingly consider companies such as Facebook and Google as potential financial services providers.
- The search for the holy grail that is Google Bank has been going on ever since digital banking took hold. It makes sense: a company that processes millions of transactions on a daily basis whose bread and butter is making online services user-friendly.
Javier Rodríguez Soler, CEO at BBVA USA, said: “Collaborations with companies like Google represent the future of banking. Consumers end up the true winners when finance and big tech work together for their benefit.”
And Brett Pitts, chief digital officer at BMO Financial Group, said of the Google deal: “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. 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.”
In 2014, Forrester said in its report Why Google Bank won’t happen that the high costs and strict regulation of setting up a traditional bank – alongside advertising revenue coming from banks – would push tech firms like Google into roles that supported the relationship between banks and their customers, such as transactional payment services, financial advice, money management and product comparisons.