In just another dice roll during Google’s worldwide game of technology RISK, the Alphabet-owned company is moving into financial services, with a checking account expected to launch next year, despite increasing concerns over the company’s interference in its search-based algorithms and how internet users receive their search results.
Code named Cache, the proposed banking service is in collaboration with Citgroup Inc. and a credit union at Standford University, which will see the Google name front and centre while the financial back end will be carried out by those who know what they’re doing – the banks.
As reported by the Wall Street Journal, Google executive Caesar Sengupta highlighted their approach would be the ‘slightly longer path’ but a more sustainable option than the turbulent Facebook Libra, which is still under scrutiny from governments around the world, including Australia (story here).
Unfortunately as has become apparent in their quest for information, Google is after financial data to penetrate further into what it already knows about you from how much you earn, where you spend your money and also your bills.
While Google has stated it does not use data from its Google Pay platform, extending the same precedent to Project Cache, according to Mr Sengupta, it is becoming increasingly more difficult to trust big-tech companies.
It comes as the Wall Street Journal reveal Google makes algorithmic changes to its search results to favour big businesses on top of ‘blacklisted sites’ to prevent certain content from surfacing.
The Journal’s findings contradict Google when they state, ‘we do not use human curation to collect or arrange the results on a page’.
Google is the most highly trafficked website, holding over 90% of the market share for all search engines, which represents a market capitalisation of $900 billion for parent company Alphabet.
In response, a Google spokeswoman said the company has done what it has always done, ‘provide relevant results from the most reliable sources available’.
While not outright denying the claims, Google has implied the blacklisting and prioritisation carried out through the algorithmic intervention is the company choosing ‘relevant’ results from ‘reliable’ sources.
The question remains, however, what does Google deem relevant and reliable?
According to the consulting firm McKinsey & Co., 58% of people surveyed would trust financial products from Google, second just after Amazon, but better than Apple and Facebook.
Google Pay has a long way to go in terms of usage, competing behind the likes of Samsung Pay and Apple Pay, despite being on track to have 100 million global users by 2020, Apple Pay had 140 million users as of last year, according to Juniper research.
Betsy Graseck, an analyst at Morgan Stanley cited by Bloomberg, has defined the ‘war for deposits’ as technology giants battle to ‘deliver value to corporate customers’.
The banks won’t be missing out either, as Graseck suggests the partnership with Google is a move to increases customers similar to ‘how airlines act as an account acquisition tool for credit cards’.
According to Graseck, The bank partnerships will give the tech behemoth a better ability to show advertisers how marketing dollars spent on its system can drive purchases.
It does, unfortunately, come at a time where Google is being forced to restrict information supplied to advertisers as international governments crackdown.
In a concession to European data protection authorities, Google will restrict its ad agency from telling advertisers what website categories users visit, though unfortunately, location and unique device numbers will still be supplied.
A multi-state antitrust investigation into Google’s search and mobile software is being carried out in the US, at the same time as the Australian consumer watchdog has accused the company of breaching consumer law over location data (story here).
Though as Caesar Sengupta sees it, ‘if we can help more people do more stuff in a digital way online, it’s good for the internet and good for us’.
