What we’re watching: Apple’s move into financial services could be a threat to traditional banks and fintechs. But it could present new opportunities for these financial institutions (FIs) to set themselves apart, per Banking Dive.
Moving in: Apple made waves in the financial sector earlier this year with the launch of its high-yielding savings account in partnership with Goldman Sachs.
Apple has also built consumer trust through fraud detection methods like multifactor and biometric authentication—an important part of digital banking.
Is Apple a threat? The Big Tech firm has a massive user base, and the relationship it’s built with those users, especially younger generations, has caused them to trust the brand with their financial lives.
How can FIs compete? The first step for FIs is to pause and take a deep breath. The hype around Apple is less about its financial solutions and more about its Big Tech brand name. Banks and fintechs still have a place in the market.
The bottom line: Apple is in a position to gain some market share in the financial services sector, but FIs should analyze Apple’s distinctive approach and seize opportunities in gap areas. Consumers are attracted to the Big Tech firm because they are familiar with the brand. But Apple isn’t a bank. FIs should ensure their offers encompass today’s digital lifestyle, but they should also hammer home to consumers that they’re the financial experts.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.