It is raining competition for some challenger fintechs as Google goes closer into quasi banking operations. Yes, while Google will not be the bank (it has to partner with banks), it will take out the shine which has made some digital banks preferable to the traditional banks. So, if an old century bank gets the blessing of Google, and people can access its services via Google, the acceleration of some digital banks may be muted.
Yes, Citi can send Google to go and battle the digital competitors while it stays at the back handling the regulatory paperworks. This is a new order with a massive new basis of competition. As I noted in this Harvard Business Review piece, Google and Facebook are out for dominance and you need to compete through the flanks. Never, I repeat, go frontally in this battle. CNBC summarizes this new Google playbook.
- Google will let users open a bank account through its Google Pay app, in a partnership with Citi and Stanford Federal Credit Union beginning next year.
- The tech giant is relaunching the payments app to allow people to pay friends, similar to PayPal’s popular Venmo and Square’s Cash App.
- “It’s going to have a broad appeal, but especially among the younger population, Gen Z, that are more tech-driven and mobile-focused,” said Anand Selva, CEO of U.S. consumer banking at Citi.
“Along with our bank partners, we were looking to make banking more relevant for the mobile-first generation,” Caesar Sengupta, general manager of payments at Google, told CNBC in a video interview. “It will help our partners make banking more approachable to that generation, and not only make it more relevant, but make it more fun.”
As you can see here, Citi is already having fun: Paypal, Venmo, etc, we have help now! Hahaha.
Incoming CEO of Citibank Jane Fraser also appeared on Google’s virtual event, saying the Citi Plex account is “a new way to bank.” Today’s customer is of a new generation that wants a “fresh, relevant and better relationship with their money,” Fraser said. “We want to empower them with an account that provides smart very smart financial services built from the ground up with financial wellness and mobile functionality at the very core of the design.”
You’ll create an account from your phone, and “within minutes your whole bank is on your phone,” Fraser said. There are no monthly fees or minimum balance requirements, and the app offers “AI-powered insights to help users save more and set their saving goals.” You’ll get a digital Mastercard debit card instantly and a physical contactless card upon request.