In November 2019, the Wall Street Journal reported:
“Google will soon offer current accounts to consumers. The assignment is expected to be introduced next year with accounts controlled through Citigroup and a credit union at Stanford University, a small lender in Google’s backyard.”
Big Tech re-entered this month with the announcement of six new members and a new target date, 2021, for the offer.
The perspective of an existing Google account raises two questions: 1) What exactly is it? 2) Do consumers have an existing Google account?
Either no one or they don’t.
A press release from one of the spouses’ banks states that “Google will provide intuitive, front-end user delights and monetary data based on its delight in creating exceptional user delights.”
So I contacted the new partners and asked them: Have you noticed any demonstrations or screenshots of this user experience? If so, what’s new and? If not, what does Google tell you and how will banks offer today?
Here’s what I heard (and read):
“It’s too early to communicate about functions. What Google will offer has still been revealed and discussed” (Coastal Community Bank).
“Collaboration is in its infancy, so we don’t have details in terms of user content and delight.” (BMO Harris)
“Lately we are working with Google to co-create the most productive delight for our student customers. So, I don’t have any main points for the percentage at this time.” (BankMobile)
“We’re not going to do a percentage of the main points at this level, as we need to record some of the quick data for launch.” (BBVA)
My answer “You can’t” percentage of main points “because you DO NOT KNOW any of the main points, right?” Well, that’s what I said in my head.
Anyone can guess what an existing Google account will include, I bet they’ll compete with the Apple Card app with:
In a July 2020 survey, Cornerstone Advisors asked what they would do if Google filed an existing account. Just over a quarter (27%) said he would open an account and 11% said he would make it their main account.
The Cornerstone exam shows data about others who would be interested in an existing “Google-optimized” account:
1) Google Pay users. Of the 11% that would make an existing Google account their main account, three-quarters use Google Pay at least once a month, and almost a portion uses it each week. In contrast, of consumers who would open a Google Account in the future, only 16% are existing Google Pay users.
Consumers who already use Google Pay are unlikely to qualify for an existing Google account. And in the Cornerstone study, only 7% of consumers are regular Google Pay users (with an additional 12% classified as “infrequent” users).
2) Men accommodated and informed. Of the 11% who would convert an existing Google account into their account, three-quarters are men, 52% have a master’s degree or more, and 53% earn more than $100,000 a year.
3) Bigger than you think. It’s not Generation Z for a cool new bank. About one millennium in six, and 13% of Generation X members, said they would make an existing Google account their main account.
4) Megabank customers. Two-thirds of consumers who would convert an existing Google account into their main account call one of the 3 megabanks: Bank of America, JPMorgan Chase, and Wells Fargo, their primary bank. Among those who would open a Google account as a secondary account, 57% of banks with a megabank.
Consumer knowledge poses two problems: 1) consumers don’t do what they say they’ll do in a survey, and 2) consumers find it difficult to see the future.
As a result, 27% of consumers will open a Google Account within 3 or even six months of launch.
On the other hand, since consumers have nothing concrete to answer, consumers who would possibly be attracted to the features I’ve indexed are not taken into account.
That said, knowledge provides valuable data about consumers who are likely to be the first to adopt the new account when launched.
Providing an existing Google account makes sense for large and medium-sized regional monetary establishments that catch up on big banks. In fact, they can take advantage of the sense of innovation that can provide being close to Google. In addition, a partnership with Google will reduce your acquisition charge.
However, you should wonder if banks are promoting their souls for the opportunity to marry Google. As a “bank license provider,” what else do banks provide?
I hear other people say ‘our visitor service’ or ‘our local market wisdom’. Fortunately, you can’t hear me laughing.
Ironically, Google will turn a variety of money establishments into bank service providers.
The existing account agreement between Google and the bank turns out to be more of a partnership than an appointment with a provider, but the latter is precisely what Google needs: it must be a generation provider.
In addition to providing existing accounts, Google is creating a debit card, providing banks with an AI-based lending tool and gaining ground with its cloud provision.
Google exploits the systemic discontent of existing bank generation providers. He thinks he can do more and do a lot of doing it.
The company has a forward-looking credit to existing suppliers. While suppliers earn credits for their customers’ profits, the effect on generation providers focuses primarily on prices and business productivity.
Google is different. This can affect the acquisition aspect and revenue aspect of the component more than any classic generation vendor.
Despite all the discussions about Google’s entry into the banking sector and bank failure, the biggest risk is for generations like FIS and Fiserv.
Here’s something that’s not intuitive: Challenger banks (i.e. Chime, Varo) are no more likely affected through an existing Google account than megabanks.
According to Cornerstone’s study, 27% of virtual bank consumers expressed interest in an existing Google account, as did the rest of the population.
You think the percentage would be higher, don’t you?
It simply shows that virtual bank consumers are virtual banks for reasons other than the fact that they are virtual: reasons such as higher interest rates, higher GFP equipment, and higher debit card rewards.
Ron Shevlin is the managing director of Fintech Research at Cornerstone Advisors. Author of Smarter Bank and Fintech Snark Tank in Forbes, Ron is ranked
Ron Shevlin is the managing director of Fintech Research at Cornerstone Advisors. Author of The ebook Smarter Bank and Fintech Snark Tank in Forbes, Ron is among the most productive fintech influencers in the world and is a leading speaker at times in the banking and fintech sector.