Google already has a valuable stash of your digital data. Now it wants your cash, too.
The search giant is teaming up with two banks, Citigroup and the Stanford Federal Credit Union, to begin offering a “smart checking” account next year. What fancy new features will “smart checking” include? Google isn’t sure. Neither are its partners.
The project, code-named Cache, is envisioned as an extension of the Google Pay digital payments system. Its goal is to help banks’ customers “benefit from useful insights and budgeting tools,” according to Craig Ewer, a Google spokesman. The focus will be mobile-first users, he said, but the specifics of what will be offered are still being worked out.
Technology companies have been trying to plant stakes in consumers’ wallets for more than a decade, with limited success. And banks have realized that digital-native millennials have the same core banking needs — a safe place to stash cash and easy ways to retrieve it — as the generations that favored marble-floored lobbies lined with teller windows.
But attempts to create digitally focused alternatives to traditional banking have largely found only niche audiences — or fizzled out entirely.
JPMorgan Chase recently shut down Finn, a no-fee digital account with limited branch access that was aimed at younger customers. Simple, a start-up that hoped to upend the banking industry with tech innovations and customer-friendly terms, was bought by a big bank, BBVA. So-called neo-banks like Chime, Aspiration and Varo have won converts, but their customer bases remain small.
Some recent offerings have hit snags. Apple’s new Apple Card, issued through a partnership with Goldman Sachs, is being investigated by New York State regulators after customer complaints about gender bias in spending limits. And Facebook lost key partners like Mastercard and Visa just months after unveiling Libra, its cryptocurrency project.
There are good reasons some of these ideas have sputtered. While customers have plenty of frustrations with their banks — high fees, paltry interest rates and poor service — those aren’t complaints that technology companies are usually positioned to solve. And tech-focused features that bank users want, like fast peer-to-peer payments, card-free transactions and in-app budgeting assistance, are now offered by nearly all large banks.
For a new product or service to succeed, it has to offer something new and shiny enough to motivate consumers to leave their existing provider. Thad Peterson, a senior analyst at Aite Group, said many of these efforts failed to take off because they weren’t revolutionizing anything.
“Human beings are by nature subject to inertia,” Mr. Peterson said. “And when it comes to banking,” he added, “you have to find a way to make something so superior that people want to have it.”