Google Is Preparing To Launch A Checking Account Backed By Citigroup And A Stanford University Credit Union
Google’s new checking account service could help banks in their battle for consumer deposits. The technology giant said last week it’s exploring how it can partner with banks to offer checking accounts through its Google Pay app. Citigroup Inc. and a California credit union signed on as initial partners for the effort -- a move that could help them pick up extra customers as the industry contends with slowing growth in deposits. “It’s a war for deposits,” Betsy Graseck, an analyst at Morgan Stanley, said in a note to clients Friday. “An opportunity to deliver value to corporate customers and pick up incremental checking accounts as well is a good business decision.” Deposit growth at the biggest U.S. banks slowed to 2.2% last year, the lowest level since 2010, according to data compiled by Bloomberg Intelligence. Consumers have increasingly flocked to newer, digital-only banks that come with flashy mobile apps and often offer higher interest rates for their savings. Citigroup has been making a push for consumer deposits after it debuted its national digital bank and restructured its U.S. consumer operations last year, bringing Anand Selva from the firm’s Asia business to lead the new unit. Average deposits in the firm’s U.S. retail banking arm have climbed 2.9% this year to $186 billion. With the Google partnership, Selva is leaning on a playbook he learned in Asia, where Citigroup has forged partnerships with consumer companies including Paytm, India’s largest payments platform, and Grab, the ride-hailing app in Southeast Asia.