Apple & Google in Finance: A Growing Threat?

Remember when Big Tech’s foray into finance seemed like an afterthought? Banks feared them, but many believed Apple, Google, and Amazon were just dabbling to boost customer retention. Fast forward to today, and things have changed—big time.

Apple is bringing more financial services in-house, reducing reliance on partners, and Google’s shifting gears. What does this mean for banks? Let’s dive in.

The Evolution of Big Tech in Finance

Back in 2020, a survey by Cornerstone Advisors revealed that 61% of banking executives viewed Big Tech—companies like Apple, Google, and Amazon—as their biggest competitive threat over the next decade. At the time, this seemed like an overreaction. While Apple had launched its credit card and Amazon was rumored to be exploring checking accounts, these initiatives appeared to be more about strengthening their ecosystems than competing head-on with banks.

For years, Big Tech’s presence in finance was primarily focused on payments. Apple Pay, Google Pay, and Amazon’s payment solutions made transactions more seamless but weren’t fundamentally threatening traditional banking. Their goal wasn’t to disrupt finance but to make their core products—iPhones, Android devices, and e-commerce—more valuable.

However, recent developments suggest a deeper, more strategic shift in their approach. Rather than merely partnering with financial institutions, Apple and Google are now looking to bring core financial services in-house.

Apple’s Deepening Financial Ambitions

Apple’s journey into financial services started with Apple Pay, followed by the Apple Card in 2019, in partnership with Goldman Sachs and CoreCard. At the time, Apple positioned the card as an extension of the iPhone experience—offering seamless activation, an intuitive interface, and attractive cashback rewards. But Apple wasn’t trying to dominate the credit card market; it was reinforcing customer loyalty to its ecosystem.

Then, Apple made a series of moves that signaled a much bigger ambition:

• 2020: Acquired Canadian payments company Mobeewave for $100M, enabling iPhones to accept contactless payments.

• 2021: Announced Tap to Pay, leveraging Mobeewave’s technology to turn iPhones into point-of-sale devices.

• 2022: Acquired UK fintech Credit Kudos for $150M, a company specializing in analyzing open banking data for credit decisions.

• 2023: Launched Apple Pay Later, allowing users to split purchases into installments without interest, further embedding financial services into its ecosystem.

• 2024: Reports surfaced about an internal project, codenamed Breakout, aimed at bringing more financial processes in-house, including payment processing, credit risk evaluation, and loan servicing.

These moves show a clear shift: Apple is no longer just partnering with banks—it’s actively reducing its reliance on them. The company is vertically integrating financial services to keep customers within its walled garden while capturing more value from transactions.

Google’s Strategic Pivot in Finance

Google’s approach has been less consistent. Initially, it planned to launch Plex, a digital checking account integrated into Google Pay, in partnership with banks and credit unions. This was seen as a game-changer—a tech giant offering full-fledged banking products. However, in 2021, Google abruptly canceled Plex, signaling a shift in strategy.

Instead of directly offering banking products, Google pivoted to providing technology solutions for banks, helping them modernize their digital offerings. The reasoning? Avoid the regulatory headaches that come with being a financial institution while still monetizing fintech innovation.

Google’s key financial moves include:

• Expanding Google Pay’s capabilities to include peer-to-peer payments, digital banking integrations, and rewards programs.

• Enhancing AI-driven financial insights to help users manage spending and savings.

• Strengthening Google Cloud’s fintech infrastructure offerings, providing banking-as-a-service solutions to financial institutions.

Unlike Apple, Google seems content enabling banks rather than replacing them. However, its vast data and AI capabilities give it a unique advantage in shaping the future of digital finance.

The Bigger Picture: Why This Matters for Banks

Banks and credit unions can no longer afford to view Big Tech as a distant threat. Apple and Google are not just building financial products; they are reshaping customer expectations around banking. Traditional financial institutions risk losing relevance if they don’t adapt.

1. Customer Experience is King

Big Tech excels at frictionless experiences. Apple’s seamless integration of financial services into its ecosystem makes banking feel effortless. Banks must invest in improving their digital interfaces and customer journeys to stay competitive.

2. The Battle for Data and Insights

Apple and Google have unparalleled access to consumer data, allowing them to offer personalized financial services. Banks must leverage their own customer data more effectively, using AI and machine learning to enhance decision-making and engagement.

3. Regulatory Challenges Could Slow Big Tech—But Not Stop It

One of the few barriers preventing Big Tech from completely disrupting finance is regulation. Apple and Google have avoided the burdens of being classified as financial institutions, but as they expand, regulators may scrutinize their activities more closely. Banks, on the other hand, are already well-versed in navigating complex financial regulations, giving them a potential edge if they can innovate within regulatory constraints.

What’s Next?

Big Tech’s playbook is clear:

• Apple is deepening its integration, cutting out third-party financial partners, and launching services like Buy Now, Pay Later. Expect more vertical integration.

• Google is leveraging AI and cloud technology to become a fintech enabler rather than a direct competitor to banks. Its focus is on providing the infrastructure behind the future of finance.

• Amazon and Meta are experimenting with financial products but have yet to make moves as aggressive as Apple or Google. However, they remain players to watch.

How Banks Can Respond

The rise of Big Tech in finance isn’t just a challenge—it’s an opportunity. Here’s how banks can stay ahead:

1. Double Down on Digital Innovation – Improve mobile banking, AI-driven insights, and seamless user experiences.

2. Leverage Open Banking – Use API-driven services to enhance product offerings and collaborate with fintech startups.

3. Strengthen Cybersecurity & Compliance – As financial services become more digital, security and regulatory compliance will be differentiators.

4. Invest in Data Analytics – Harness customer data to offer personalized products and experiences that rival Big Tech’s AI-driven offerings.

The financial landscape is shifting fast. Should banks embrace collaboration or prepare for competition? Hit reply and let me know your thoughts!