Banking is the Next Consumer Market That Google Could Dominate

Google is the most recent of the Silicon Valley tech giants that have made a move into the world of personal finance and banking. It was recently reported that Google will soon be offering checking accounts to individuals, and they could be available by next year. Google will be offering these accounts in partnership with banks and credit unions, and the project is being called “Cache.” The partner banks will handle the compliance and financial activities for the accounts.

Caesar Sengupta of Google spoke to reporters about the new venture. He pointed out that financial institutions will be more upfront to interact with customers than other similar programs being offered by other tech companies. Currently, Apple has a partnership with Goldman Sachs to offer its Apple Card credit account. In this venture, the financial institution is not visible to the customers.

Since the banking side of the operation is handled by the financial institutions, it begs the question of why tech companies stand to gain from a joint banking venture. One benefit for Google is the information that the tech giant can gain about banking customers that use its checking account product. This provides a detailed picture of people’s financial lives on a daily basis.

Google intends to offer other perks to customers and bank partners, such as loyalty programs. Google hasn’t decided if a service fee structure should be put in place. Sengupta reported that he believes that a no-fee policy could put Google’s checking accounts in a better competitive position.

The idea to offer checking accounts comes after the success that the company has enjoyed with its Google Pay and Google Wallet services. Other tech companies have followed suit by offering payment services. These companies include Apple and Facebook. The social media giant introduced a digital payment product earlier in 2019, and it is intending to roll out a digital currency that it has named “Libra.” The cryptocurrency is being developed in conjunction with other organizations.

Google is currently teaming up with Citigroup and Stanford Federal Credit Union. Google is motivated to attract digitally savvy and younger people who want to manage more of their daily activities with online apps. Sengupta revealed that the checking account platform will also provide a means to work with large sets of data to make them into products that add more value to the customer relationship.

Google’s representative assured reporters that they don’t use Google Pay data for advertising purposes, and it doesn’t share personal information from users of this service with advertisers. Google is cognizant that people might be wary of sharing checking account information with an information company. This could pose an extra challenge for the tech giant, and the current sociopolitical climate seems to be a further hindrance that will need to be overcome for the new checking account venture to succeed.

Are Residents in the Republican States Better with Money than Those in the Democratic States?

It’s easy to understand why a lot of people would assume that the people with the highest annual incomes would also be the people with the best credit scores. Based on a recent study, that assumption has been debunked.

The study went to great lengths to analyze the financial behaviors of people at different income levels as well as in different states. To say the results are a bit surprising would be an understatement.

At the Individual Level

It turns out that high-income earners tend to have greater difficulties managing their money than low-income earners. This is likely due in part to them leading financially complex lives where they take on more debt, which later results in more debt issues. There’s also a likelihood that the lifestyles of the wealthier individuals cause them to overextend themselves in an effort to maintain said lifestyles.

At the State Level

For the most, the study focused on credit and debt issues for residents by state. Some of the findings were actually quite interesting.

For instance, it turns out that South Dakota residents have the highest FICO scores on average at 727. That’s based on an average annual income of $56,274, which ranked 33 out of 51 for the 50 states and the District of Columbia. It’s worth noting that Montana had the highest average FICO scores in 2016, the last time such a study was done.

At the bottom end of the FICO score spectrum were the larger populated states with the larger urban areas. The list at the bottom included states such as Washington, D.C., Maryland, Texas, and California.

In an attempt to explain the data, Ted Rossman, an industry analyst representing the company that ran the study, ““It shows that it’s not just about how much you have, but also how you manage it. In some of these high-cost states, even though they make more, it goes right out the window. In D.C., they have the highest income in the country but they also have more debt than anyone else.”

He later added, “It is better to live in a low-cost place even if you don’t make as much. It seems to stretch further,”

Other Interesting Data

Some other interesting data came to light from the study. It turns out that the people in Republican-leaning states do a much better job of managing their finances than people living in Democrat-leaning states. As a point of reference, Republican-leaning states held 7 of the top 10 FICO scores on average while the Democrat-leaning states scored 8 of the 10 bottom spots.

One explanation offered for this disparity is the Republican-leaning states tend to be populated with more mature and established residents while the Democrat-leaning states have younger populations.

Another interesting result came back that the average debt burden in D.C, is $86,730, which actually exceeds the area’s average income of $85,203. Clearly, the cost of living in some states is outpacing the rise in income.

According to Rossman, the bottom line is this: “If you can pay your bills on time, and keep your debts low, that’s most of the battle right there.”

Financial Philosophy For the Future

It’s no secret that consumers desire convenience. In days past, companies would create a product, build their business, and do what they could through the use of patents and monopolistic practices to prevent competition from becoming relevant. However, most large players today have similar products of similar quality

Banks need to be willing to innovate rapidly and massively to stay competitive. If one financing firm incorporates a new program that makes financial transactions significantly easier and more efficient for consumers, consumers will inevitably migrate to that platform. Technology has advanced rapidly over the years, and that is still the case. Consumer demands evolve with the change in technology, and banks must constantly be looking for trends, evolutions in consumer preferences, and new services to keep up with their consumers and their competition.


Corporations within the finance industry must adopt a philosophy of being open to new and perhaps radical ideas.

This also means striving for a diverse crew of employees. Companies are learning that when people of different backgrounds and areas of expertise are allowed to collaborate openly, they receive the most forward-thinking and innovative ideas.


As discussed earlier, technology is constantly evolving. Whenever a new technology is released on the market the demands of consumers change. Financial firms must stay on top of these changes. This does not mean just keeping up with trends set by other companies in the field. It means constantly searching for new ways to satisfy customers that the customers may not even have realized they wanted before.

Firms must be on top of innovations related to APIs. APIs (Application Programming Interfaces) are crucial to the customer’s experiences and are being used to make groundbreaking innovations in the industry.

Company Vision

The younger generations are increasingly concerned with the visions of companies. They will abandon companies that lack ethics or concern for the issues that they are themselves concerned with. Financial companies need to show consumers that they are working to empower all members of society and improve the lives of those in the larger community.

Banks need to take these steps to break the molds of tradition. They are going to have to step up if they wish to stay on the forefront of the financial industry.

Sustainability is a huge factor. Companies need to prove to consumers that they are taking steps to create a more sustainable future. People also want to feel like they are empowered to follow their dreams. This means that all individuals and small businesses must be given the tools to be successful.