Apple and Goldman Sachs want to create the world’s most powerful neobank
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Despite the problems in the banking system, two legendary brands in the technological and financial world — Apple and Goldman Sachs Bank USA — have joined forces to create potentially the most powerful fintech in the United States. This is reported by Forbes Ukraine.
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Last week, the Apple company stunned the US banking industry with the news of the launch of a new financial product — a deposit account.
At a time when the average bank deposit rate is less than half a percent, Apple announced that it would offer its depositors 4.15% per annum with no withdrawal limits and deposit guarantees by the Federal Deposit Insurance Corporation (FDIC).
The launch of the new product takes place at a difficult time for the US banking system: after the collapse of one of the market leaders — Silicon Valley Bank. Depositors are in no hurry to open deposits, and fintech startups lack funds for business development.
Apple does not have a banking license. The company acts as a “showcase” for Goldman Sachs Bank USA, which has a license and deposit insurance from the FDIC.
In the language of the fintech world, Apple is a neobank like Chime, Revolut and Monzo. The power of the “apple” brand in the world is unprecedented, if you consider that more than 2 billion iPhones on the planet will now offer Goldman services.
“Apple is moving at the speed of the world, while many banks squeeze out only 70 km in time,” noted analyst Dan Ives from Wedbush Securities.
The new product is available only to customers with an Apple Card credit card. It takes a few minutes to open a neobank account, and the interest on expenses, which are called daily funds, are automatically transferred to the account. Account status is available in the control panel of the Apple digital wallet. Now iPhone owners have another advantage.
“Creating such an ecosystem is a brilliant idea,” said David Donovan, executive vice president of financial services at consulting firm Publicis Sapient.
It is worth noting that the new deposit account is not the first fintech service offered by the giant from Cupertino. Last month, the company started offering its own service “buy now, pay later”, according to which customers can split the payment into four payments without additional interest or commissions.
In July 2022, Apple made it so that sellers can accept credit card payments directly from their iPhones. By offering such financial products, the company integrates itself into every aspect of users’ lives.
Why Apple and Goldman savings accounts
The appearance of deposit accounts on Apple wallets is probably connected not so much with the desire to increase income, but with the desire to bring even more IPhone owners to the financial services of Apple and Goldman.
According to Ives, two billion people around the world have an iPhone, but less than 10% of them use an Apple Card.
Net interest margin may not be a priority for Goldman either.
“They offer deposit accounts with higher than necessary interest rates to create competition for online banks rather than traditional ones. They reduce their margins by offering these products,” said Stephen Biger, director of financial services research at Argus.
David Donovan, executive vice president of financial services at the consulting firm Publicis Sapient, said that Goldman made a horse move, and instead of spending its own money on attracting clients, it decided to join a huge ecosystem like Apple.
And even two such powerful brands need to be careful when it comes to regulators. The US Treasury is closely monitoring the cooperation between banks and technology companies, and the Consumer Financial Protection Bureau is already investigating Goldman Sachs credit cards.
It is worth adding that Apple’s new savings account cannot contain more than $250,000, which is more than the maximum amount of FDIC insurance.
Author: 
News editor Roman Myronchuk writes on the following topics: Economy, finance, banks, cryptocurrencies, investments, technologies
Source: Ministry of Finance
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