I am, on the whole, a delighted Apple customer. And as a fintech specialist, I have been fascinated by Apple’s moves into financial services.
For Apple, maybe financial is just flipside brick in the wall, not the wall itself
I have followed the companys trajectory from the primeval Mac models, stood at the front of the queue to get the original iPhone, bought (cough) every one of the watches, bought some AirPods, and happily watch its TV and films.
So recently, I have repeatedly been asking myself, “Why are they going into banking?” The logical wordplay is that the end point is they want to be my bank. But is that right? What if Apple has a worthier play? And if so, what might that be?
Of all the big tech companies (outside of China), Apple seems to have ripened the most successful and broadest financial services offering. For example, it recently spoken the launch of a savings worth in the US, which reportedly saw inflows of $1 billion dollars in deposits in its first four days. Opened in undertone with Goldman Sachs, it offers a very lulu rate of 4.15%, and equal to Forbes, by the end of the first week, it had opened roughly 240,000 accounts. Not too shabby!
Sanjeev Kumars research firm WhiteSight has just published a report on Apple, which includes a handy infographic showing Apple’s portfolio and the journey it has been on to embed financial services into its consumer offerings. Looking at it, you realise how methodical and deliberate it has been in towers capabilities. Through partnerships and acquisitions, it is slowly starting to resemble a bank.
According to WhiteSight, its financial services aspirations stage when to the late 1990s when Apple held discussions with Capital One well-nigh creating a joint card. However, it started in hostage with the launch of Apple Pay in the US, partnering with JP Morgan in 2014. Apple Pay has been incredibly successful and is now misogynist in 76 countries. In 2022, there were 507 million Apple Pay wallets globally. Other things of note include the launch of the Apple Vellum in 2019 and its BNPL proposition in 2023, both in the US and with Goldman Sachs as a partner. In 2022, there were 6.7 million Apple Vellum holders.
The vestige overwhelmingly points to a merchantry that knows its customers and knows that they will use its FS products and services and make them a lot of money.
As well as a relentless focus on iconic diamond and towers products that its customers will love, Apple has worked incredibly nonflexible on towers consumer trust. It has made a virtue out of ensuring customers fully understand how much it cares well-nigh their privacy. Privacy has sat at the heart of its trademark advertising. It is known for not collecting or selling user data, and encryption protects data in transit. This strategy is paying off. It was crowned the most valuable trademark of 2022 in Kantar’s BrandZ global report. Kantar highlighted, “Apple’s new data-collection policies for its iOS software have reshaped the razzmatazz and social media industries as profoundly as any government regulations.”
Trust can be leveraged, which can be seen in Apples move into FS.
I spoke with flipside Apple fan, Faris El Mahgiub, an expert in user and consumer wits as Innovation and Product Leader for First Abu Dhabi Wall in the UAE, well-nigh what he thought was happening. His response was fascinating:
“The Apple tideway has been to build outstanding products, build trust, build spanking-new services, wilt fully trusted and then make financial products/services. But is that where it stops? What do I midpoint by that? Look at the old banks. Despite everything that has happened through crises and mis-selling scandals, our warmed-over hunter-gatherer brain, which craves security whilom scrutinizingly everything, still trusts them, which ways we stay with them, encourage our children to wilt their customers and then buy products and services from them.
I hypothesise that Apple has been working nonflexible to connect to that warmed-over smart-ass and create an intrinsic, old bank-like trust relationship. Trust to them is the most potent asset. Apple may see that financial services products are a way of reinforcing and worsening that trust relationship rather than stuff the endgame.
Perhaps there is one increasingly to add to the spritz chart. Build outstanding products, build trust, build spanking-new services, wilt trusted and then build financial products/services and hey presto, wilt fully trusted!”
But why? What does Apple see that has resulted in such a focus on trust?
We live in a very uncertain world. Social media has demonstrated the power of 140 notation in waffly the geopolitical landscape or how clicks, likes, and algorithms can polarise a society. Generative AI is throwing up entirely new things to worry about. Where is content coming from? Is it real? Maybe in all this uncertainty, trust becomes the most valuable asset.
Perhaps Apple can see the emergence of the “Trust Economy” and, for its customers, wants to sit at the heart of this economy, rhadamanthine a true partner to help people live their weightier lives. Apple could wilt a remote tenancy of our lives and a filter onto the world, permitting us to sleep better, eat better, shop increasingly consciously, manage our money, act as textbook on the news we receive, and manage our social lives. It is well on the way to this already.
Maybe financial is just flipside brick in the wall, not the wall itself!
About the author
Dave Wallace is a user wits and marketing professional who has spent the last 25 years helping financial services companies design, launch and evolve digital consumer experiences.
He is a passionate consumer well-wisher and champion and a successful entrepreneur.
