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Should Technology Giants Venture Into The Banking Space?

by on June 10, 2016
 

Consumers might be wondering what it would look like fi technology giants decided to get involved in the banking industry. Now That Samsung, Apple, and Android are all exploring payment options in the mobile sector, the step towards digital banking seems rather small. While these apps have significant advantages compared to regular financial applications, it will not be so easy to becoming a banking service provider all of a sudden.

One of the main advantages solutions like Apple Pay and Samsung Pay have over traditional offerings is how the user experience is a lot more pleasant. Dealing with native bank apps is not fun most of the times, and the struggle to provide real-time data. For some reason, these technology giants can provide exactly that feature one’s bank apparently cannot.

Technology Giants As A Bank?

But there is more, as these applications work natively with our mobile devices. Although banks are innovating and trying to establish a presence in the digital world, the rollout of their mobile apps is a lot slower. Moreover, not all of the banking apps support mobile payments, particularly when contactless payments are concerned.

If one of these technology giants would decide to take the plunge into the banking sector, the question becomes what the service would look like. All of the players as mentioned earlier have their own payment application, which would naturally be integrated. Since these apps already store payment card or bank information, the banking interface could end up being a layer on top of the existing offering.

The biggest hurdle to overcome for companies such as Apple and Samsung is how well they can handle customer engagement. All of these businesses are keen on technology, and very active on social media as well. In a way, they are perfectly positioned to properly handle customer relations. Combining real-time payment information with adequate customer support could make these companies serious contenders in the banking space if they decide to pursue that option.

Rewards will play an integral role in the technology giant-banking ecosystem, though. Due to the relationship all of these companies have with retailers and their payment methods, interesting deals could be offered. Cash-backs are just one option to consider, as incentives can come in many different formats.

But there is a different form of reward that is worth pursuing as well. Banks use customer data to sell it to their partners, which is not something consumers are excited about. If these technology companies can guarantee they will not sell customer data, that in itself would be the biggest reward, anyone can hope for.

In the end, there is a genuine opportunity for technology firms to become involved in banking. However, none of the major companies has indicated they want to pursue this type of activity for the time being. One never knows what the future might hold for the likes of Apple and Samsung, but for now, this kind of activity remains nothing more than speculation.

Header image courtesy of Shutterstock

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