Payment processing options have grown exponentially for customers over the past decade. Paypal is now an established as a secure web payment platform, and created user-friendly social media styled payment app Venmo. Technical literacy and the proliferation of mobile applications spawned a new way to pay the rent, split the bill, and a host of other simple money transfer operations. Then the shadow industry of banking outside the bank grew with online loan providers like So-Fi, now established as Fin Tech. These services can cost less than traditional banking, and are typically much faster at making credit decisions. Now Big Tech companies such as Apple and Facebook are taking the place of Fin Techs, allowing users to pay through messaging without the one day transfer period. Banks are known for protecting customer data at all costs and having a wealth of experience and knowledge in personal finance, but they are not known for having state of the art technology, so embracing Big Tech seems to be the best way to focus on key capabilities. The issues that arise in this kind of partnership are data security, ownership, and regulation. Every technology company has a different approach on how they use customer data and how customers use their services, like how Amazon collects it to create recommendations where Google sells it for advertising, so there are opportunities for unique experiences for banking customers.
How should partnerships between big tech and banks be regulated?
Is FinTech still relevant with Big Tech offerings? (ie Venmo vs Imessage payments)