Tech mega-companies such as Amazon, Apple, Meta and Alphabet, Google’s parent company, occupy the delicate space of being both a friend and a perceived threat to traditional financial institutions.
For one thing, their credit cards, buy-now/pay-later products, and potential deposit accounts depend on traditional financial institutions or fintechs to get started. Banks are also increasingly migrating to some of their public cloud services. On the other hand, they periodically toy with the idea of rolling out financial products to their massive customer base that would compete with banking partners.
“One of banking executives’ biggest fears is that the big four tech titans – Amazon, Apple, Facebook and Google – are getting into banking and going after their customers,” wrote Alyson Clarke, senior analyst at Forrester, in a 2020 report.
None of these companies has taken steps to obtain a banking license, so for the time being they need the support of financial institutions to offer banking products. But the prevalence of application programming interfaces and infrastructure providers means they don’t need to develop financial capabilities in-house or take on regulatory complexities, said Elif Yayla, senior intelligence analyst in fintech at CB Insights.
“Everything can be integrated with just a few clicks,” she said.
In his mind, the goal of big tech forays into financial services is to lock users into their ecosystems. “They benefit from customers spending more time in their product environments,” she said. “They’re getting closer to transactions and more data on user behaviors, which will generate more revenue in the long run.”
Here’s a look at the latest investments Amazon, Apple, Meta, and Google have made in their financial services.