Can You Compete Against a Google Bank?

December 2, 2015 at 9:04 am Leave a comment


Google has officially become your competitor by getting a mortgage broker’s license and teaming up with Zillow to offer a mortgage comparison service for residents of the Golden State. This is important enough as the latest example of how technology companies are blurring the line between themselves and financial institutions.

The news is of course also important because you don’t have to be Nostradamus to realize that this service is coming East real soon or that the ultimate aim of this partnership is to be a major player in the mortgage business.  Google has been low key about the announcement but Zillow’s press release is bubbling over with ambition: “This partnership allows us the unique opportunity to help borrowers by providing them with the industry’s most accurate, real-time information about home loans and mortgage lenders while simultaneously offering Zillow Group’s lenders increased reach for their businesses.”

What really intrigues me is that Apple, Google and, more cautiously, Facebook are leveraging more than just their technological prowess; they are leveraging the goodwill and trust they have built up with consumers who have had nearly constant personal contact with their technology for most of their lives. Increasingly, credit unions can no longer compare themselves to banks and take comfort in the fact that they are more customer friendly. The real question is: are your members more likely to trust Apple with their money than your credit union?

Think of the advantages these companies have. Aside from delivering grade A technology, they are a ubiquitous part of the daily experience of most Americans. We get more news from Facebook feeds than newspapers. We keep our tablets on our nightstands; Google before shopping and ask Siri any question that pops into our head. We trust these companies to be with us wherever we are.

Why does that matter? Because whereas previous generations put their faith in top-down organizations, the newer ones are much more comfortable with networks like Facebook. Whereas previous generations viewed technology as a threat to their privacy and safety (think 1984 or Hal in 2001: A Space Odyssey), this generation has a lot of Edward Snowdens who are more fearful of government intruding on their technology.

No one should be surprised that millennials are the members most receptive to a home buying process that is heavy on the Internet and light on paper. This generation also doesn’t need a physical credit union branch to feel safe and secure.

When Apple opens its bank – and it will – you better have already positioned yourself as something more than a traditional brick-and mortar institution with a few gadgets. The bottom line for me is this: how do you convince people to trust your credit union as opposed to their old friends Google, Facebook, and Apple to provide convenient access to their money?

Entry filed under: General, Mortgage Lending. Tags: .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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