Google is a massive company that is increasingly involved in more and more areas of its users’ lives. It’s where we turn every day for answers to pretty much everything from simple questions to complicated research. It’s where we get our email, store our photos, manage our calendars, and manage our files. It’s already the most dominant mobile operating system, and it now makes smart home devices. With its purchase of Fitbit it’s clear Google also wants to dominate wearable technology.
Or, said another way, Google is everywhere.
Now, according to The Wall Street Journal, Google is working on a new project called ‘Cache’ that involves offering checking accounts. Yes, Google wants to be your bank.
Well, more specifically, Google plans to partner with banks to offer its customers access to banking products like checking accounts. In this case, accounts would be offered by Citigroup, as well as a credit union at Stanford University, and those financial institutions would provide all of the financial services and account management.
Google, on the other hand, would provide convenience along with loyalty rewards. For example, users would access their accounts through GooglePay, much like Apple’s users access its branded credit card through ApplePay.
Speaking of which, with recent moves by other tech companies into the personal finance space, it was probably inevitable that Google would follow suit. Apple recently introduced its own credit card with Goldman Sachs, and Facebook has announced its plans to launch a digital currency called Libra. It might be worth mentioning that both of those have come under intense scrutiny, with New York regulators launching an investigation into AppleCard for discriminating based on gender when extending credit limits.
I actually think this is less a deviation for Google than it might seem. In fact, by providing users with checking accounts, as TechCrunch pointed out, “Google obviously stands to gain a lot of valuable information and insight on customer behavior with access to their checking account, which for many is a good picture of overall day-to-day financial life.”
It’s helpful to remember that for all of the useful services Google provides, the company is, at its core, an advertising platform. That is the underlying business model that makes it huge amounts of money, and it’s the driving force behind every product or service it offers.
And while Google hasn’t suffered the same level of scandal as the next-largest advertising platform, Facebook, the strategy is the same–monetize people’s personal information.
Of course, that lack of overall scandal is reflected by the fact that consumers say they are far more likely to trust Google with their financial information than some of its competitors. In fact, only Amazon was rated higher in a McKinsey & Co. survey included in the Journal’s report. Fifty-eight percent of consumers said they would trust Google for financial products.
The Journal’s reporting also says that Google won’t sell financial information to advertisers, which is great, but that doesn’t mean it won’t use that information to target specific advertising at customers based on their income or spending habits. Which, is really the only reason Google would get into financial products in the first place.
It’s also the only thing you need to know when considering whether or not this is a good idea. I’m not sure there’s any amount of “loyalty program” or convenience that makes up for the cost of having even more of your personal information monetized.