Tag: finance

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.

Why Marketers Need to Understand Finance

Why Marketers Need to Understand Finance

The conventional wisdom in business is to promote good coherence between all departments in an organization. For some reason, businesses tend to run into problems when it comes to the finance department. This often comes down to communication breakdowns between the marketing and finance departments. The problem is often due to a difference between the language each department uses and goals that might seem to be at odds with each other.

Marketing professionals are concerned with understanding customer perceptions about the business, and they’re willing to pay whatever is necessary to increase the company’s perceived value to the public. The finance department is tasked with delivering marketing goals while maintaining the lowest costs possible. 

Why finance and marketing don’t always get along well

One problem between these two areas of business is language, but an even more potent factor is that marketers fail to understand certain finance concepts. Marketing professionals need to know how to frame their communications to finance so it is more attuned to the finance professional’s mindset. 

Marketing people see increased business traffic and customer loyalty as a win for the business. However, when they propose marketing campaigns to finance for approval, they often fail to show actual dollar amounts and cash flow advantages of the proposed activities. 

How language plays a key role

It’s somewhat ironic that marketing CMOs often forget one of the most important rules of marketing when dealing with the CFO. That is to speak the language of the target audience. In order to succeed with a marketing proposal, the language needs to include figures of increased revenue versus expenditures over set time periods. 

The finance department will need a lot of specific information to make its decision, but this is data that the marketing department usually has, so this shouldn’t pose as a barrier to moving forward. For example, marketing has details about metrics, implementation and process. 

The next step is to educate the finance department about actions that will incentivize customers through the use of perception, feedback and mindshare. Marketing also measures online factors like site visits, email subscriptions and bounce rates. After all the specifics are added up, the next step is to calculate the total cost of acquiring new customers as a result of the changes to the marketing solutions. 

Pitching the proposal to finance

The marketing strategy details have been outlined in a way that finance can understand, but it still has to present the data in a way that is easy for the finance department understand. You could use tables or spreadsheets that finance professionals are familiar with in order to bring the message home and seal the deal. 

Marketing is important for all aspects of a business. That’s why marketing and finance professionals need to work together seamlessly. This can be accomplished when both sides adopt the mindset and presentation styles of the other. When everyone understands each other, the business can make better decisions.