Google has become the latest tech giant to venture into personal banking, having teamed up with Citigroup and a credit union at Stanford University to offer checking accounts to consumers.
According to the Wall Street Journal, which first reported the development, the new Google project is called “Cache” and will roll out across the US as early as next year.
The plan involves users accessing their accounts via Google Pay and allowing them to add Google’s analytic tools to traditional banking services, but importantly Google’s partner banks will deal with all day-to-day financial and compliance issues.
This approach is almost certainly designed to allay regulatory concerns about yet another big tech company gaining access to such sensitive personal information as bill payments, standing orders and salary details.
“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,” said Google executive Caesar Sengupta in an interview with the Journal.
“If we can help more people do more stuff in a digital way online, it’s good for the internet and good for us,” he added, while making it clear that Google would not sell users’ financial data.
Sengupta, who also said that Google hasn’t decided yet whether to charge a fee for the service, emphasised that the company doesn’t use Google Pay data for advertising or share that data with advertisers.
However, by providing users with checking accounts, TechCrunch observed that “Google obviously stands to gain a lot of valuable information and insight on customer behavior with access to their checking account, which for many is a good picture of overall day-to-day financial life”. Or as the Journal put it, checking accounts “contain a treasure trove of information”.
This partly explains why moves by big tech firms to get into banking have stirred controversy. For example, regulators around the world have expressed concern about Facebook’s proposed Libra digital currency, which only this week saw more partners from the financial services sector drop out of the project.
And Apple’s joint credit card with Goldman Sachs has run into trouble after regulators in New York launched an investigation into allegations that the algorithm used by Apple Card discriminates against women.
Sourced from Wall Street Journal, TechCrunch, Barron’s, New York Times; additional content by WARC staff