Will Big Tech transform banking?

Tech giants are entering financial services on several fronts, from payment solutions, creditworthiness algos, crypto, to ‘buy now, pay later’. Is it a question of time before they take on large banks or is there more to the story?

The digitalisation of the banking sector is increasingly shifting resources to building online tools and reinventing the client experience. Digital modernisation is also helping enhance the products and services offered, without necessarily having to meet physically between bank specialists and customers. However, a new breed of companies is completely re-designing the banking experience through “fintech” offerings, essentially putting technology first, to create a unique value proposition.

Fintech trends shaping the future

  1. The rise of digital banks

Financial services catering solely online are seeing immense popularity, attracting both sophisticated and everyday investors. A matter of convenience, access, and control in real-time is helping fuel the demand for digital financial services.


  1. Real-time mobile and cross-border payments

A range of companies are offering real-time cross-border payments, with services allowing for money to be converted automatically into local currencies. Real-time payments have tripled since 2020 in the US, accounting for 17% of all disbursements made in 2021.


  1. ‘Buy now, pay later’ (BNPL)

Demand for BNPL surged last year, as customers embrace the flexibility to complete their purchases through several scheduled payments. The space was marked last year by Block (formerly Square)’s acquisition of Afterpay, the leader in the exploding trend.


  1. Super-apps

Platforms that typically offer a vast and diverse suite of products and services from a single app (e-commerce, transportation, finance, travel, and entertainment), also known as ‘super-apps’ are on the rise. In Asia, WeChat and Grab are leading, while in the US, PayPal and SoFi are very popular.


  1. Integration of crypto and NFTs

Specialised crypto players continue to reach the masses with the use of enormous marketing budgets. NFTs marketplace and crypto payment solutions are leading the trends of new offerings coming to market. Traditional banks are also jumping on the bandwagon of crypto, offering crypto financing and custody.

fintech map

Fasten your seatbelt: Tech giants’ entry into finance

The idea in its simplest form is Big Tech (Apple, Google, Facebook, Amazon, and Microsoft) knows how to deliver a near-perfect digital customer experience and may be able to leverage their masses of consumers’ data analytics and brand value to enter banking. So far, Big Tech players are favoring partnerships with big banks, and offering services limited to credit and contactless payments.

Apple – leveraging its brand power & proximity to the consumer

Apple has long dipped its toes into credit and payment solutions. Its most famous fintech feature Apple Pay is currently available in more than 70 countries, with over 500 million users, with services such as peer-to-peer payments. Apple Card and Apple Cash are still only available in the US. So far it has relied on partnering with existing financial services companies. For example, it has partnered with Goldman Sachs and other partners such as CoreCard Corp. and Green Dot Corp for offering credit cards.


Apple pay


However, recent moves indicate it aims to move deeper into credit and consumer finance. First, it has made several fintech acquisitions: Mobeewave (2020), and Credit Kudos (2022). Bloomberg also recently reported Apple is working on a multi-year internal project named 'Breakout', which aims to bring financial services in-house and could broaden payment features beyond the US. Features could include payment processing, payment plans, risk assessment for lending, fraud analysis, credit checks, and additional customer-service functions. Apple’s acquisition of UK fintech Credit Kudos also points out a potential move into ‘buy now, pay later’.

Google – digital wallet and partnerships

The search giant’s main quest into fintech remains with payments through Google Pay, which acts as a digital wallet for contactless payments, like Apple Pay. It counts more than 100 million users.

G Pay

Google also ventured into bank accounts for consumers in 2020 by partnering with Citi, but shut it down less than 2 years later as it announced it would rather develop a digital banking and payments ecosystem instead of competing with banks. Breaking into financial services is more difficult than the tech giant anticipated, and the strategy seems to be focused on expanding the Google Cloud business which has more potential.

Facebook (Meta) – Payments and crypto ambitions

The social media giant has taken steps to venture into both payments and crypto, but the bulk of the efforts consists of enabling payments on the platform, with Facebook Pay, being part of its significant e-commerce ambitions. Facebook Pay allows users of Facebook or Instagram to pay for merchandise, send money to friends, or donate. It competes with Paypal as it is free, but on the downside, it is only available to users of Facebook or Instagram.

In terms of crypto, Facebook’s efforts to create a unique blockchain-based currency, named Libra, also known as Diem, were blocked by regulators. It is now focusing mostly on building the metaverse.

Amazon – Payment tech to foster sales

The giant retailer focuses on payments to help grow its massive online sales. It has a two-decade-long partnership with JP Morgan Chase, which helps it supply the Amazon Prime credit card. It has also a partnership with Visa for its payment network.

The tech giant has long experimented with payments, with the goal to reduce friction in the sale process. In 2019 it acquired Worldpay, a leading payments technology company, helping it to strengthen the checkout process using Amazon Pay: a digital wallet for customers and a payments network for both online and brick-and-mortar merchants and shoppers.


Am checkout

A 2021 survey revealed that Amazon Pay has grown into a major online payment provider with a 24% user share in the US. In 2018, Amazon was reportedly exploring launching bank accounts by partnering with financial institutions, but the project was later shut down.

Microsoft – Payments & Cloud

Microsoft Pay is a mobile payment and digital wallet service that lets users make payments and store loyalty cards, on the web. Apart from Microsoft Pay, Microsoft has otherwise kept its fintech efforts quiet, and instead focuses on providing key technologies such as cloud for financial services companies.


While we must acknowledge that Big Tech has entered financial services, their reach is limited, as banking remains outside of their core capabilities. They prioritise partnerships and the few initiatives to partner with financial institutions to open bank accounts were abandoned. Instead, their focus is on providing consumers with credit and payment solutions. It is likely that the threat of anti-trust, the challenges to sourcing specific expertise, and reputation risks are too high for Big Tech to make the jump. Smaller and medium-sized players are most likely to continue to dominate the digital banking sphere, along with the traditional banks that attempt to come to the market with their solutions or through acquisitions of digital banks.


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