Like Amazon, Apple, Facebook, Google infiltrate financial service providers

Mega tech companies like Amazon, Apple, Meta, and Alphabet, Google’s parent company, occupy the thorny area of ​​being both a friend and a perceived threat to traditional financial institutions.

On the one hand, their credit cards, buy-it-now/pay-later products, and potential deposit accounts depend on traditional financial institutions or fintechs to get off the ground. Banks are also increasingly migrating to some of their public cloud services. On the other hand, they regularly toy with the idea of ​​launching financial products for their huge customer bases that would compete with banking partners.

“One of the biggest fears of bank executives is that the big four tech titans — Amazon, Apple, Facebook and Google — will get into banking and go after their customers,” wrote Alyson Clarke, senior analyst at Forrester, in a report the year 2020 .

None of these companies have taken steps to obtain a banking license, so for now they need the support of financial institutions to offer banking products. But the proliferation of application programming interfaces and infrastructure providers means they don’t have to build financial capabilities in-house or take on the regulatory complexities, said Elif Yayla, senior intelligence analyst in fintech at CB Insights.

“Everything can be integrated with just a few clicks,” she says.

In her opinion, the goal of big tech companies invading financial services is to engage users in their ecosystems. “They benefit from customers spending more time in their product environment,” she said. “You get closer to transactions and get more data on user behavior, which will generate more revenue in the long run.”

Here’s a closer look at recent investments Amazon, Apple, Meta, and Google have made in their financial services arms.

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