Will Tech Titans Transform Lending?

August 10, 2021


Big tech has a growing role in credit, according to the Bank of International Settlements.


Facebook, Google, Apple, and Amazon are all eyeing financial services. Non-financial services businesses need to take a closer look at embedded financial services before these tech titans gobble up market share. 


That’s because tech titans don’t expand into new verticals unless they see significant revenue opportunities. Think about it. Big tech has unique machine learning and artificial intelligence capabilities. They are not burdened by the legacy technology stacks of many banks. 


And they can monetise financial services data in ways other business models can’t.


Amazon keeps merchants on its mind


Amazon has a lot of financial products for merchants and consumers. Insurance. Payments. And merchant working capital. Ultimately, Amazon wants to encourage more merchants to sell and more consumers to buy — and it knows lending can be a gateway to this. Imagine the troves of data Amazon collects from its marketplaces and these financial products. This knowledge allows them to continually refine their products.


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Facebook flexes its payment muscles


Facebook owns some of the biggest social networks in the world. That includes its namesake, along with WhatsApp, Messenger, and Instagram — all of which are becoming more and more integrated with one another. Facebook has long been pushing payments and ecommerce technology across each network. Look at WhatsApp Pay, WhatsApp Business, Payments in Messenger, and now ecommerce checkouts on Instagram. Embedding lending into these environments is a logical next step. 

Apple Card merges credit lines


A reported third of iPhone owners have enabled Apple Pay on their iPhones. And iPhones are everywhere. You see it every time you step outside. Just like Amazon, Apple has used its substantial customer data to launch financial products. Take Apple Card as an example. 


Tim Cook highlighted the unfairness of credit score calculations at a recent Apple event. “When there were two holders of a credit card, one got the benefit of building a good credit history and the other did not. We want to reinvent the way this works.” Apple Card has begun to allow spouses and partners to merge their credit lines.

A new lending landscape


These developments are just a glimpse of what may be to come from these mammoth companies. That’s because they all have the modern world’s oil — billions of ‘barrels’ of data — that can help them launch products quickly across the globe. One thing’s certain, financial services look like a huge piece of the pie to tech titans. Non-financial services businesses can bolster their product lines before the tech takeover by partnering with innovative fintechs like credolab.