A run for their money, or the ultimate power move? #Google announced last week that they have started to explore how they can partner with banks to offer checking accounts through its Google Pay app. Citigroup Inc. and a California credit union have signed on as initial partners in hopes that it will grow their customer base.
Deposit growth at the biggest US banks have slowed down by 2.2% in the last year which is the lowest it has been since 2010. People are got in the habit of digital banking and transfers that often offer higher interest rates for their savings. With this innovation, banks will essentially use Google’s methods for adding customers. “Kind of like how airlines act as an acquisition tool for credit cards” says one of the analyst at Morgan Stanley.
What can Google benefit? The bank partnerships will give them a better ability to show advertisers how marketing dollars spent on its system can drive purchases. All in all, Google may be onto something. But, this raises questions like how secure will the banking be. Google is a powerhouse in the technology realm and we’d hate to see hackers or account information lost from this new venture.