The accounts for the Google Cache project will be managed by Citigroup and Stanford Federal Credit Union, confirming what has been said in The Wall Street Journal
Google plans to offer checking accounts next year through a project called Cache, which will be run together with Citigroup and Stanford Federal Credit Union.
This was reported to the CNBC media by a source familiar with the company’s plans, which represents the boldest movement of the Big Tech company in the banking business. Most of the previous efforts have focused on credit cards and payment platforms.
According to CNBC, the accounts for the Cache project will be managed by the aforementioned companies, Citigroup and Stanford Federal Credit Union, confirming in turn a report in The Wall Street Journal.
As part of the project, the source adds, the company will become the last Silicon Valley leader to try its luck in the banking space. Previous attempts by Apple and Facebook faced obstacles, with consumers increasingly skeptical about providing personal information to large technology companies.
WSJ Caesar Sengupta, Google executive, said the company has no intention of selling customer data, claiming:
“If we can help more people do more things digitally online, it’s good for the Internet and good for us.”
Concerns and possible setbacks
CNBC said that for years, banks had been worried about competition from small and agile fintech startups. Now it turns out that Big Tech companies like Google and Amazon, which have relationships with hundreds of millions of consumers, may be the biggest threat.
In 2018, Amazon reportedly talked with JP Morgan about the implementation of checking accounts. Also, Apple launched a credit card for iPhone users earlier this year with Goldman Sachs, Uber announced its boost to financial services last month with Uber Money and Uber Drive, and just Facebook just announced Facebook Pay, a new system to facilitate payments through its social networks and messaging systems.
According to CNBC, Apple’s offer has encountered multiple problems. His association with Goldman has been strained after Apple said it created the card without the help of a bank. In addition, complaints recently arose that the algorithm used to determine customer credit limits is biased towards men.
Even, the source adds, Facebook’s foray into digital currency saw major financial sponsors get out of regulatory concerns.
Senator Mark Warner, a leading voice in the regulation of technology companies in Capitol Hill, recently told CNBC’s Squawk Box today:
“It worries me where we have come, be it Libra or Google’s proposal … these giant technology platforms enter new fields before there are some regulatory rules of the road.
Once they enter, the ability to extract them will be virtually impossible.”
Google’s plans are to mark current accounts with the names of financial institutions, not theirs, CNBC emphasized.