What Credit Unions Must Know About Google’s New Checking Account

Some unexpected and somewhat unwelcome news came to light recently that has caused ripples among credit unions. Traditional financial institutions are currently forging alliances with tech giant Google. 

So, what does this mean for you as a credit union? Could they end up disappearing from the Google search engine results if they do not form a similar partnership?

It is worrying news for the nontraditional finance sector. After all, the new Google checking account could well be just the start of things to come.

Will investments and lending also become part of Google’s product umbrella? Will those new Big Tech products and services attract consumers away from their existing credit unions?

Here, we take a closer look at the potential impact of these latest developments on credit unions. We also examine how credit unions can fight back against the possible risks that this new checking account could pose.

The Google Checking Account – The Background

The financial industry has known for some time about the threat posed to it by Big Tech. However, the surprise announcement of Google’s plan to begin offering a smart checking account still came as a shock.

Google revealed its partnership with Stanford Federal Credit Union and Citibank in mid-November 2019. It is a development that could bring huge changes to how the financial industry serves its consumers.

Beginning in 2020, these two major institutions will partner with Google to offer a co-branded smart checking account. Google Pay program will offer it.

Currently Google is still developing the majority of the program’s details. All that is currently known is that the accounts go under the code name of “Google Cache.”

The project will still reside within the financial institutions and retain federal deposit insurance. The “smart” element will be the extra features and budgeting tools that offer extra value to account holders.

The two partners so far, Stanford Federal and Citibank, will not be the exclusive deal partners. At the moment, though, there are no other partners named.

A Google spokesperson expressed the brand’s interest in working with more partners in the future. The company will take on board more institutions when it has scaled the product to suit users’ needs in 2020.

Stanford Federal is an institution that has strong ties to its community, while Citi is a major global bank. Google supposedly chose them for their innovative abilities and the focus and scale they could offer.

Yet, it is impossible to overlook the fact that Stanford Federal’s headquarters are in Palo Alto, close to Google’s headquarters. Google’s employees are among those that this credit union can serve.

Many other credit unions in the country can boast impressive ties with their local communities. However, they cannot boast such strong links with Google.

What Will This Checking Account Mean for Credit Unions?

Although credit unions have received the news with some concern, it is unknown what the impact will be. What most agree on, however, is that these deals will certainly cause considerable change in the landscape of financial services.

Some credit unions worry this could signal a mass defection of consumers to banking services offered by Big Tech. After all, Google’s new partnerships could be the first step of many more.

Although financial institutions are not disappearing from this new banking structure, Google could become the key gatekeeper. This could also simply be Google’s initial foray into a much wider banking arena.

Details are currently sketchy about the product that Google will offer. Some people believe that it will probably be mobile-first with a click customer experience.

Credit unions may not need to panic quite yet. It could take some time for Google to grow its market share.

Nevertheless, there is evidence that well-known tech organizations are increasingly attracting consumers, so they can supply their financial services. In 2020, it is highly likely the line between banking and technology will....-->

Some unexpected and somewhat unwelcome news came to light recently that has caused ripples among credit unions. Traditional financial institutions are currently forging alliances with tech giant Google. 

So, what does this mean for you as a credit union? Could they end up disappearing from the Google search engine results if they do not form a similar partnership?

It is worrying news for the nontraditional finance sector. After all, the new Google chec...


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