The FinTech Movement has made significant progress in the finance value chain. The proliferation of internet and mobile phones has made it possible to bring financial services closer to those who do not have a bank. Due to its expansion it has encouraged rapid growth in the sector and also the interest of investors in this category. Fintech had one of the most successful quarters in history in the first quarter of 2021, with record deals, funding, exits and mega rounds.
Unsurprisingly, tech giants like Google and Apple emerged from the back door and made their way into the Fantastic ecosystem to turn the ongoing boom in FinTech to their advantage. With a series of strategic acquisitions, major tech companies are moving from digital banking and lending to budgets and payments. Fintech may be just another source of revenue, but it also provides companies with the opportunity to teach them how to collect data on cost patterns and understand their customer base.
What steps does Apple and Google take to enter the fantastic market?
Apple and Google are two technology companies competing for a foothold in the financial markets. Moving beyond payments, the two companies have made it their goal to be key players in the sector. Both companies have made significant gains that will provide them with long-term competitive advantage and a large share of the tech industry.
Apple's entry into FinTech began in 2012 with the launch of the Apple Passbook, which allowed users to store movie tickets, discounts and loyalty cards all in one place with the airline. In 2015, the passbook was renamed Wallet. Apple Pay, which puts privacy at the center of design, was launched in 2014 after experimenting with the waters of the Cupertino-based consumer tech giant. Apple Pay uses NFC-based payment systems to facilitate transactions.
Apple came close to buying Illinois' Discover Financial Services in 2014 for 37 37 billion, according to Bank Innovation. The Apple Card was introduced in 2020 as a way to strengthen the company's commitment to its customers. While it doesn't offer additional rewards, such as Chase Sapphire Preferred Benefits, for example, it still has some great benefits, especially for Apple's loyal customers and fans.
Apple prioritizes privacy and security. They promise that their customers will not be "products" of their services, meaning they will not collect or sell their personal information to take advantage of it. This approach can give the organization a competitive advantage in the market.
With the debut of Google Wallet in 2011, Google entered the financial market a year before Apple. Customers can pay with Citi and Mastercard using this wallet. At the 2015 I / O Developers Conference, Google launched Android Pay, which uses near-field communication (NFC) technology to enable transactions. Google Pay strengthened Google's digital payment capabilities in 2018, allowing users to pay on their desktop, iOS, phone and desktop. With 6.7 monthly basic subscribers, Google Pay has become the most accepted non-bank alternative in India.
Google has expanded its financial ambitions by partnering with Citigroup to launch the Checking Account product in 2020, which will be accessible through the Google Pay app. According to a survey by Research & Markets, Google Pay users are expected to increase double-digit rates with Samsung Pay by 2020 in the case of contactless payers.
What’s the future holds? Can Apple & Google Become a Bank One Day?
Although the Fantastic Revolution has bundled basic banking services, making them more accessible to low-income people and rural areas, it is impossible for companies like Apple and Google to break away from traditional banks and merge into one. Will be. Despite their financial resources, the way to provide essential banking services is fraught with a number of regulatory challenges that can be a major obstacle for these companies.
For starters, the digital business lacks credit history, which is a key component of the sophisticated underwriting options for coming up with an adult lending platform. Furthermore, to become a lender, digital business requires the trust and maturity of banks. There is a lot of smoke around data privacy. Many industry observers believe that their entry into FinTech is influenced by the possibility of data collection.
However a cloud of no-confidence cases and oversight by the incoming Congress could derail his plans to become a bank. If it continues to accelerate, companies like Google could split into smaller segments, making it harder for them to become banks.
In addition, banks do not sit on the Internet business better than them. Bank for International Settlements has expressed concern over the arrival of Big Tech (BIS). A more comprehensive approach to financial regulation, competition policy and data privacy legislation has been advocated. The charge of large technology in finance, which has gone beyond regulatory limits, has required mechanisms to increase the scope of regulatory and regulatory risks between authorities and policy makers, national and international. Opportunities. And risks.
Apple and Google becoming a bank in the future will be a Titanic feat. Banks and technology companies can develop more personalized solutions by collaborating with banks and financial services providers and collecting data.
Summary
Tech companies would have taken a significant step in FinTech through strategic acquisitions and partnerships with traditional banks. However, the quest to offer complete banking services seems like a futile endeavor. A big shadow of regulation is hovering over technology companies. There is a lot of distrust from both the public and the government as to what they will do with the consumer data. They are also not equipped to provide basic banking services, such as underwriting, which can be complicated for tech companies. These factors keep tech companies two steps behind from becoming full-time banks.
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