The banking tech trends that will dominate 2020 - American Banker

Big tech companies, with their armies of top-notch developers and knack for creating convenient products, made inroads in financial services in 2019. But that appears to be just the start of their efforts.

Apple launched its Apple Card with Goldman Sachs in August. Facebook announced Facebook Pay, a payment mechanism that works with Messenger, Instagram, WhatsApp and Facebook, in November.

Big tech companies, meanwhile, continued to make inroads with their small business lending efforts. Amazon Lending loaned an estimated $1.5 billion to sellers in 2017 and $1 billion in 2018. PayPal makes more than $1 billion in working capital loans every quarter (70% of them in neighborhoods where banks have shut down branches, according to the company) and Square Capital has made $5.5 billion worth of loans to 275,000 sellers over the past five years. Stripe launched its own working capital arm, Stripe Capital, in September.

The Square Cash debit card is used by 3.5 million people, the company also launched a debit card for businesses in January. Square also has a Square Cash app for person-to-person payments.

Uber is building a stable of financial services products for drivers and customers in its recently created Uber Money division. It already offers a bank account, debit card and mobile banking app through Green Dot. Uber plans to let drivers automatically save a portion of each trip and create a holistic financial wellness app.

Some tech companies have tipped their hand about their 2020 plans: Google plans to offer checking accounts to consumers through Citigroup and Stanford Federal Credit Union.

Facebook plans to launch a cryptocurrency payment network next year based on a new digital asset, Libra. Though Congress and regulators have slammed this effort, it should not be counted out.

One potential obstacle to the large tech companies is a bill proposed in the House that would curb their financial services aspirations, called the Keep Big Tech Out Of Finance Act. It’s unlikely to pass, at least in the current political environment, but that situation could change quickly depending on circumstances.

And while there’s often a bank (Goldman, Green Dot, Citigroup) behind the scenes of these tech company efforts, the large tech companies are growing powerful scale, hoovering up their data, and building relationships and brands.