It is no secret that the banking industry is a ripe target for big tech. Recently, we've seen Elon Musk's "X" make it known they are entering the payments realm, having begun the process of applying for regulatory licenses and development of the software needed. Additionally, we saw Apple launch its new savings accounts to complement Apple Cards, which saw $10B in deposits as of August 2023, according to Goldman Sachs.
Apple has made another move, taking advantage of "open banking" in the UK to bring a new feature to its payments platform. According to Fintech Futures, Apple has launched a new feature in the UK, allowing customers to connect eligible debit and credit cards in their Apple Wallet to view account balances and transaction histories from supported banks like Barclays, HSBC, and NatWest.
“By enabling users to conveniently access their most useful account information within Wallet and at the time of their purchase, they can make informed financial decisions and better understand and manage their spend,” comments Jennifer Bailey, vice president of Apple Pay and Apple Wallet.
Indeed, this new feature will allow UK Apple Pay users to make more informed purchases with easy-to-access transaction insights made available directly in their Apple Wallet. Apple says it worked closely with banks under open banking rules to launch the feature and hopes it will make it easier for customers to manage their finances.
To use the new Apple feature, users must have the latest iOS update -- sure to solidify and grow their user base -- and authenticate through their financial provider's app or website.
What This Means for Traditional Banking
Traditional banks and credit unions do have the advantage over big tech, having established themselves with more products and services that big tech have not -- or can not for now. But, make no mistake, big tech is a real threat. We've seen the rise of neobanks such as Chime, where individuals are able to do their banking entirely digitally, with no physical locations (something that can be seen as an asset to traditional banks, but also an additional cost).
Traditional banks and credit unions need to focus on their ability to accept deposits from whichever channel is their customers' preference. Furthermore, they need to strengthen their fraud detection capabilities, providing reliable protection for their customers' funds.
This includes checks, where AI and machine learning technologies are streamlining check deposits, while also increasing fraud detection capabilities -- tackling the challenge of fraud that is running rampant across the country.
While big tech companies have the "flash" to make noise in the industry, traditional banks and credit unions still occupy center position in the financial lives of customers.