Google has announced that it will begin offering checking accounts next year. The tech giant joins a recent trend of Silicon Valley companies entering the financial sector. \u201cLast year, Amazon had reportedly been in talks with J.P. Morgan over a checking account. Apple launched a credit card for iPhone users earlier this year with Goldman Sachs. Uber announced its push into financial services last month, and just Tuesday Facebook announced a new system to facilitate payments across its social media and messaging systems,\u201d CNBC writes.<\/p>\n
These efforts have faced obstacles, reports CNBC. Apple created tension with its partner Goldman Sachs after advertising its new credit card as being created without the help of a bank. Facebook\u2019s digital currency libra spawned regulatory concerns, causing an exodus of financial backers.<\/p>\n
Google hopes its entrance into consumer banking will go more smoothly. Google launched Google Wallet in 2011, so the financial-services industry isn\u2019t new for the behemoth. It now aims to offer bank accounts run by Citigroup Inc. and a credit union at Stanford University, reports The Wall Street Journal. Big Tech has recently faced scrutiny due to privacy concerns, so Google will have to convince users that it can be trusted with their finances and personal data.<\/p>\n
Virginia Senator Mark Warner has been closely following this trend of tech companies entering the financial sector with skepticism. \u201cI\u2019m concerned when we got, whether it\u2019s libra or the Google proposal, \u2026 these giant tech platforms entering into new fields before there are some regulatory rules of the road. Because once they get in, the ability to extract them out is going to be virtually impossible,\u201d said Warner.<\/p>\n
However, Google claims to want to put the financial institutions it\u2019s partnering with, not itself, front and center. Says Google executive Caesar Sengupta, \u201cOur approach is going to be to partner deeply with banks and the financial system.\u201d<\/p>\n
As people rarely switch checking accounts, these bank accounts could provide Google with a treasure trove of information, including access to how much money people make and where they spend it, reports the Journal. Mr. Sengupta says that this information would not be sold to advertisers, but would instead be used to bring value to consumers, including loyalty programs.<\/p>\n
Consulting firm McKinsey & Co. released a survey stating 58% of people would trust Google with their finances, which was better than Apple and Facebook but not Amazon, reports the Journal.<\/p>\n
With their eyes on the millions of users Silicon Valley can access, banks are trying to figure out how to best partner with tech companies in order to grow and remain competitive. Says Citigroup\u2019s US consumer bank head, Anand Selva, \u201cWe have to be where our consumers are.\u201d<\/p>\n
Sectors:<\/strong> The average momentum score for the Sector Benchmark ETFs<\/a> decreased from 17.36 to 15.91. Momentum increased for six of the 11 sectors last week. Technology\u2019s momentum score jumped 6 points, the largest increase of the week. Utilities, which lost 14 points, had the largest drop in momentum score for the week. Technology overtook Financials for the top spot, while Utilities remained the laggard.<\/p>\n