Why Big Tech Is Dominating the Financial Services Sector
Big Tech companies have made it clear: they won’t just settle for Silicon Valley. They want to dominate the globe. Recently, companies like Apple, Amazon, and even Facebook have been making moves to tackle the financial services sector. Not all hope is lost for traditional players, though: financial institutions and fintechs can emulate some of Big Tech’s winning strategies.
What are Big Tech companies offering?
Let’s start with Apple. Launched in late August, the Apple card offers Apple Pay, a white titanium card, and an easy setup process. With no annual fees and 2% cash back rewards, consumers get the standard credit card treatment – with a twist. Rewards are paid daily and available to use for (almost) any purpose through the Apple Card app. By keeping the app at the forefront and the physical credit card on a request-only basis, Apple has successfully merged into the financial services sector without losing its tech-forward foundations.
Amazon’s credit builder announcement followed right behind Apple’s, aiming to provide alternative credit resources to people with limited credit access. The Amazon Credit Builder is a secured credit card designed for those looking to build or rebuild their credit. It’s backed by a refundable security deposit and has no annual fee. But here’s the catch: the card has an interest rate of 28.4% and can only be used on Amazon.com.
“All over the world, people with less money pay more for financial services.”
While Facebook may be labeled as a social media giant, the company has also found its own pocket in the financial services sector. According to the company’s white pages, “all over the world, people with less money pay more for financial services. Hard-earned income is eroded by fees, from remittances and wire costs to overdraft and ATM charges.” Working to provide a more inclusive global financial system, Facebook’s forthcoming digital wallet will be the sole home to a new cryptocurrency called Libra.
From fintech to big tech
What’s the secret to big tech’s success? Companies like Apple and Amazon are able to successfully enter the financial services sector because they provide consumers with a sense of familiarity. While many consumers are well aware of the benefits of fintech offerings, the truth is that they have an easier time adopting new ideas from companies they already know.
How many of your friends have an Amazon Prime account? Or at least one Apple product?
Big Tech has permeated almost every aspect of our lives; it’s no surprise that it’s getting involved in our financial lives, too. However, that doesn’t mean that only big names can be successful in the financial services sector. What about your business model draws consumers in? How is the company developing and nurturing digital relationships with its customers? You have the resources to leverage your company’s brand and be just as sticky of a solution as Apple or Amazon. With intentional social messaging, a consistent and legitimate brand, and a user-friendly product, fintech can look more like Big Tech each day.
Taking back the financial services sector
The key to the modern day consumer’s loyalty is trust. People are no longer solely interested in numbers and facts; they want to be able to relate to your products and your brand. Everything should feel personable, and that’s possible for you – no matter what financial services sector your company falls into. By investing in one’s brand, prioritizing a positive user experience, and designing new products with existing customers in mind, fintechs can emulate the success of Big Tech.
Interested in learning more about new ways to reach the modern consumer? Download our report on breaking through to Gen X, Y, and Z with better data.
You might also be interested in:
- SPARK 2019: Financial Services Presentations
- Nonprime Lending: Risky Repeat or Savvy Adaptation?
- What the FHFA Ruling Means for the Future of Alternative Data Use
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About Honor Donnie
Honor Donnie is a Marketing Intern at Urjanet, with a passion for content creation. When she’s not at Urjanet, she can be found studying Political Science at Clark Atlanta University.