Google is getting into the banking business. But exactly why--and what it means for the person actually signing up for a Google bank account--leaves many more questions than answers.

Google revealed to The Wall Street Journal on Wednesday that it's partnering with Citigroup and a Stanford University credit union to offer checking accounts to people around the U.S. starting in 2020. In an interview with the Journal, Google's Caesar Sengupta said the effort will see Google "partner deeply with banks and the financial system."

According to the report, Google hasn't yet decided whether to charge fees on the checking accounts it'll operate. And, for now, it sounds like Google won't offer any loan programs or other options banks generally provide to customers.

Google is just the latest big tech company to move into banking. Earlier this year, Apple launched its Apple Card, a credit card it created with help from Goldman Sachs. Uber also offers bank accounts as part of a broader partnership with a bank called Green Dot.

But exactly what Google wants with checking accounts is unknown. And whether users would want to hand over their cash to the search giant is similarly a major question mark.

Checking accounts are, by their very nature, relatively simple. And, in many cases, they fail to deliver the broader value banks can derive from loaning money.

At first blush, then, it's unclear why Google would want to offer checking accounts. The company would ostensibly hold people's money, and if it doesn't charge fees, may not generate the kind of return on it that it might prefer.

But the Journal astutely points out in its piece that checking accounts offer massive amounts of data on people. Spending habits are clearly illustrated in bank accounts, and it's not hard to mine that data to determine where people shop, what their income level might be, and much, much more.

Is it possible, then, that Google is using bank accounts to capture even more data about its users?

The company was quick to tell the Journal in the interview that it has no intention of selling consumer bank account information and would not share it with advertisers. Instead, Sengupta said, Google would try to build a more attractive banking experience.

That may be true. And the company's banking efforts might ultimately prove appealing. But as someone who has watched in recent years how big tech companies have found themselves caught up in using (and frequently misusing) consumer data for their own gains, I have to wonder if this is a good idea for Google. This is an issue Facebook is dealing with most acutely right now, and it's still a problem for other companies as well.

I also have to question why Google, like other big tech companies, feels the need to move into so many different industries. This is an internet company with a hardware arm that now wants to break into financial services. It's as big of a head-scratcher as Apple getting into credit cards. And it makes me wonder just how far these companies might go to find customers.

So, is it possible that Google's bank account initiative will turn out well? Of course. But it's also possible it'll be a mess. And until the company can prove it knows what it's doing in checking accounts--and will really create an experience that my bank either cannot or won't offer--I'll stick with where I am.

Published on: Nov 13, 2019
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