When reports surfaced in late 2019 of Google’s plans to partner with banks and credit unions on “smart checking accounts,” the news quickly reverberated throughout the industry.
Comments from Felix Lin, Google’s vice president of payment ecosystems, during a standing room-only breakout session Monday at the 2020 CUNA Government Affairs Conference reflected some of Google’s first public statements on the initiative.
The level of interest was understandable given the far-reaching potential impact of this effort.
Joining Lin on stage was Joan Opp, president/CEO of Stanford Federal Credit Union (SFCU) in Palo Alto, Calif. It’s one of Google’s two previously announced financial institution partners (the other is Citibank) on what is known internally as Project Cache.
The first misperception Lin aimed to dispel is that Google is “offering checking accounts to consumers.” Instead, Lin says Project Cache is an extension of Google Pay that will provide a consumer-friendly interface serving as a conduit to deposit accounts, housed by individual credit unions and banks and carrying their brands.
Opp corroborated Lin’s point, confirming SFCU’s brand will remain front and center.
Opp also sees this as an opportunity for credit unions to play a vanguard role in the development of a high-profile new product. SFCU is uniquely positioned for such a role, given that it shares a Silicon Valley backyard with Google and counts leading tech firms like Google and Tesla among its field of membership.
She hopes other credit unions will become “fast followers,” employing this as one vehicle to bridge the broader technology challenges facing the movement.
Field of membership remains a top-of-mind question regarding Project Cache. While financial institutions are required to determine a potential customer’s eligibility through standard processes, credit unions must clear the additional field-of-membership hurdle.
Lin made clear that Google is aware of this factor specifically facing credit unions and that work continues on designing an interface to elegantly accommodate it.
Opp has a “glass half full” perspective on this hurdle, pointing out it would be irresponsible to open the floodgates to the potential volume a marketing partner of Google's scale can power without applying some form of guardrails.
This led to a broader discussion of the division of roles and responsibilities between Google and participating financial institutions. One point is abundantly clear: ownership of the account will reside with chartered financial institutions like SFCU.
“We have no interest in becoming a bank, and we believe we can best serve the broader ecosystem by sticking to our strengths: building helpful user experiences anchored on highly secure and scalable infrastructure,” Lin says.
Opp reiterated that compliance responsibilities will be shared, but will ultimately rest with the financial institution in regulators’ eyes. Lin clarifies that in cases where there is a clear regulatory obligation, Google will act as a bank service provider.
Lin drew a further distinction between the handling of a user’s financial information and search data.
“We understand that not all data is the same,” he adds, explaining that Google intends to go above and beyond with tools in place to give consumers choice, control, and transparency with respect to their data.
Lin made clear that Google is focused on getting the product right over getting it released quickly. More than 90 days after initial press reports, available information on Project Cache largely remains at the level of broad principles.
Nonetheless, this session provided valuable additional context and an opportunity to observe first-hand the spirit of partnership in place between SFCU and Google.
We’ll undoubtedly be following Project Cache closely in the months to come.
GLEN SARVADY is managing partner at 154 Advisors.