Google is partnering with six more banks to offer digital checking and savings accounts to U.S. Google Pay users starting in 2021, it said Monday, as Covid-19 shutdowns worldwide have caused an increase in the use of digital banking.
- Digital banking was already on the upswing before the pandemic: 60% of customers under the age of 70 used digital banking tools in 2019, according to a survey from consulting firm McKinsey & Company.
- Users will be able to access their checking and savings accounts through Google’s digital wallet Google Pay, but the accounts themselves will be managed by the FDIC-insured partner banks.
- Bank Mobile, BMO Harris and four other banks have signed on as partners, joining Citigroup and Stanford Federal Credit Union and Google says it plans to partner with more U.S. financial institutions.
- The partnership gives the banks a way to market their brand to consumers digitally without having to rely on, or build, their own digital banking tools.
- Google isn’t the only big tech company to make the push into financial services, Amazon, Facebook, and Apple have all made strides because it is another way to gain valuable user data.
- A sizable share of consumers trust big tech with their financial needs, according to the McKinsey survey, which found Amazon was the most-trusted at 65%, followed by Google with 58%, Apple with 56% and Facebook with 35%.
84%. In the U.S., Citigroup saw an 84% increase in daily mobile check deposits in May and a tenfold surge in activity on Apple Pay as quarantined customers used digital banking tools.
“Banking has changed irrevocably as a result of the pandemic. The pivot to digital has been supercharged,” Jane Fraser, president of Citigroup and CEO of its consumer bank, previously told Forbes. “We believe we have the model of the future – a light branch footprint, seamless digital capabilities and a network of partners that expand our reach to hundreds of millions of customers.”
There is a chance that Google, Amazon and Facebook will all see pushback as each face individual antitrust investigations that continue after a landmark hearing last week that marked a culmination of a 13-month investigation by the House Judiciary’s antitrust subcommittee.