New banks

What Google’s foray into banking means for incumbent and challenger banks

  • Plex accounts by Google Pay are a bold example of big tech’s foray into banking.
  • Big tech finance players are threatening challenger banks.

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What Google’s foray into banking means for incumbent and challenger banks

As increasingly tech savvy consumers opt for digital first finance solutions, tech companies are seeking access to user financial data as an additional revenue source. In 2019, Apple launched its credit card in partnership with Goldman Sachs. Facebook is in the works of developing its cryptocurrency venture Diem, formerly known as Libra. Amazon lends billions of dollars to merchants in its marketplace. And now, Google is entering banking.

Google recently revamped its Google Pay app and announced its partnership with 11 banks for the 2021 launch of its consumer bank accounts. Plex accounts by Google Pay will be integrated into the newly designed app and will combine the regulatory protections and financial expertise of banks with Google’s technology and user experience.

“There is a need for new experiences to meet the evolving needs of a new generation of customers who have grown up mobile first in an environment where everything from hailing a cab to opening a bank account can be done with simple taps on a mobile device,” said Google’s vice president for payment ecosystems, Felix Lin.

“In response to this need, we recently launched a redesigned, mobile-optimized Google Pay that makes it easy to pay, send money, split expenses, save with offers and rewards and stay on top of your finances. Plex accounts are a new mobile-first bank account integrated into Google Pay.”

Banks partnering up with Google will undoubtedly reap the benefits of its technological prowess, global scale and massive customer base. Google’s access to huge amounts of user data can be utilized to provide consumers with tailor-made financial solutions.

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