Google will team up with Citigroup to offer current accounts 14 November 2019
Google announced this week that they are partnering with Citigroup and Stanford Federal Credit Union to launch current account services to customers starting in early 2020.
The project, code-named Cache will enable users to access their account through Google Pay. Google Pay is Alphabet’s digital wallet that they launched four years ago to compete with Apple Pay. The new offering is intended to help the digital wallet in its continued battle with its rivals to become more deeply enmeshed in their customers’ lives.
While this is yet another foray into financial services from a big tech company, Google is following in the footsteps of Apple’s credit card offering by partnering with a financial institution.
Instead of taking the direct competition route, the company is developing the offering in close partnership with Citigroup. “Our approach is going to be to partner deeply with banks and the financial system,” said Caesar Sengupta, Google’s general manager of payments.
The company wants to attract younger, more digitally-savvy customers. With this demographic managing more and more of their life online, Google recognizes an opportunity to add financial services to their already extensive list of digital offerings.
Unlike the tech world that Google is accustomed to operating in, the financial world is much more stringently regulated. This is where the collaboration with Citigroup is so valuable. The partnership means the financial services giant will handle the bulk of the compliance and regulatory requirements.
To stay competitive, financial institutions need to be where their customers spend their time. Customers, especially youngers ones, are on their phones and rarely visit bank branches. This initiative is a recognition of that fact and is a positive step from Citigroup to meet customers where they are.
Further details regarding unique aspects of Google’s offering are scarce. Asked about how the account would differ from traditional current accounts, Joan Opp, the chief executive of the Stanford Federal Credit Union, said “Those are some of the details that will be determined closer to launch.”