Google to enter banking with Code-Name “Cache”
A few weeks back, Google announced that it is looking to enter the market with Google “Cache” in partnership with Banks and Credit Unions. Expected in 2020, the rollout is expected as a new offering integrated into its Google Pay. The intended goal by Google is to make this checking account smarter than the average checking account catering more to the smartphone user demographic.
Who’s signed up?
Citigroup and Stanford Federal Credit Union are both engaged with Google as their lead partners, where Google is developing the interface for the interconnect to the institutions.
Why bother with Google when you have your own bank?
Google being a mega-tech house with massive internet resources and customer behavior data can apply its resources with the banking community to provide additional “advantages” in products/services to the end-user. This would manifest in loyalty programs, with the possibility to have a “free” checking account. The “free” checking is still not committed to yet.
The “Uphill Battle” in the crowded space of banking
While Google has enormous brand recognition, it is not known for its banking. What’s even more challenging, is its data breaches in the past with the likes of Alexa, for instance does not impress the average consumer to see Google as a strong “Data Privacy” tech company. While regulators are very stringent in the banking space, Google has not been performing at their standard to date. This will require some convincing of consumers, where Apple has had a stronger record of data protection when they started Apple Pay. The relationship with your bank being less “personal” than brick and mortar traditional banks will also require some thought on how to get people comfortable with the idea of just a pure online interaction. Google recognizes these challenges, which is part of the project objectives to overcome.
This is not Google’s first step into the banking market with Google Wallet debit card having a brief existence. Additionally, online shopping compare sites, Pony express services, Google compare for auto insurance, credit cards, banking products, and mortgage products in both the USA and UK. With 36% of US Consumers using 3rd party apps on their phones (PayPal, Apple Pay, Venmo, Google Pay) and billions using smartphones, the opportunity is there as space is not saturated. Sizing the adoption of further penetration in that space is what needs doing, to ensure a well-protected app can perform greater ease of use while ensuring privacy and security. For eCommerce stores, it will be a new option to take in payments at the checkout.