Finance Everywhere, Member Exclusive

“We have no intention of becoming a bank”: Is Big Tech really a threat to banks?

  • While Big Tech companies can be intimidating, the oftentimes overlooked factor is the underlying strategy behind their expansion into financial services.
  • Big Tech companies are not coming into the industry to compete with banks as a unilateral force - they are looking to partner to enhance their own business.
close

Email a Friend

“We have no intention of becoming a bank”: Is Big Tech really a threat to banks?

When big technology companies start to expand into different industries, they are quick to be labelled as ‘disruptive’. In the financial services sector, the circulating rhetoric has been that Big Tech is coming into the industry as a unilateral force to compete with banks.

“The industry tends to talk about this kind of big tech threat as one overarching problem, and I think that’s really the wrong characterization,” Kate Drew, director of research at CCG Catalyst told Tearsheet. 

Big Tech is a nickname given to the five biggest technology companies in the world: Apple, Google, Facebook, Amazon and Microsoft. While Microsoft just recently announced its first consumer fintech move by adding BNPL into its browser, the other four are all more established players in the space. 

The sheer size and capabilities of these companies can be intimidating, as is their advantage of having an existing user base of millions of people to offer banking products to. However, the oftentimes overlooked factor is the underlying strategy behind their expansion which, upon a closer look, suggests that direct competition with banks is not really on their main agenda.

 


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

0 comments on ““We have no intention of becoming a bank”: Is Big Tech really a threat to banks?”

Green Finance, Member Exclusive

Green Finance Briefing: Greenwashing on Wall Street, and climate tech stocks outperforming the market

  • Regulators have started to investigate misleading ESG claims at big banks, signaling that they’re paying close attention to the wave of greenwashing happening in finance.
  • Elsewhere, climate tech stocks continue to outperform the market, and UN Secretary General Antonio Guterrez bemoans the counterproductive attitude of the finance industry towards climate change.
Iulia Ciutina | June 24, 2022
Member Exclusive, Payments

Payments Briefing: Is the ‘Apple Pay Later’ hype warranted?

  • This week, we review the hype around Apple Pay Later and try to determine how much of it is justified.
  • We also look at Square’s move to bring Afterpay to in-store purchases, making it even easier to pay in four – and how this greater ease could lead to overspending and growing consumer debt.
Ismail Umar | June 23, 2022
Member Exclusive, Online Lenders

Lending Briefing: The SMB Brexit, and digital lending VC funding

  • Given the recent announcement from expense management platform Brex to stop serving SMBs, how are its competitors looking to address the market?
  • We also take a look at the first quarter VC funding in fintech, and how lending compares to other verticals in the space.
Iulia Ciutina | June 22, 2022
Green Finance, Member Exclusive

Given the lack of standardization, how should FIs think about ESG reporting?

  • Creating a well-defined global framework for ESG and sustainability factors will bring more accountability in the financial sector, but this task is very complex in nature.
  • Financial institutions are increasingly feeling the pressure from an ESG standpoint, given the SEC crackdown and demands from consumers, but the lack of standards makes it hard for them to formulate a strategy.
Iulia Ciutina | June 21, 2022
Member Exclusive, Payments

How the global microchip shortage is affecting the payments industry

  • While chip-based payment cards face the biggest threat, experts say the only aspect of payments immune to the shortage is physical currency.
  • As banks look to address the problem, one of the solutions being discussed is extending payment cards' expiration dates.
Subboh Jaffery | June 20, 2022
More Articles