Citigroup C is likely to join forces with the tech-giant, Google, to help the latter offer consumer checking accounts. In other words, clients will be able to access their personal bank accounts through the Google Pay app.
The plan is to launch this service from 2020. Google is also partnering with Palo Alto-based Stanford Federal Credit Union. Both Citigroup and the credit union will be responsible for the fulfillment of financial and compliance requirements. The news was first reported by The Wall Street Journal.
“This agreement has the potential to expand the reach and breadth of our customer base while complementing our continued investments in digital,” Citigroup said in a statement.
Through this partnership, Google Pay’s customers will be able to keep money in accounts thereby meeting the federal regulatory standards for banks. Nonetheless, Google plans to partner with some other banks as well in the future in order to access a wider customer base.
Financial institutions and technological companies have been collaborating lately, in order to meet the growing demands of customers for improved digital offerings. Apple and Goldman Sachs GS rolled out a virtual credit card in August.
Also, JPMorgan Chase JPM is working on an e-wallet that would enable companies such as Airbnb and Amazon.com to provide their clients with virtual bank accounts.
Citigroup continues to execute growth strategies, such as entering the booming digital consumer payments industry and expanding global market presence, thereby aiming to diversify revenue sources. However, growing interest of tech companies in the financial services space is likely to intensify competition.
Year to date, the stock has gained 42%, outperforming 29.2% growth recorded by the industry.
Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock in the financial space worth considering is FS Bancorp, Inc. FSBW. The stock has witnessed 5.4% upward estimate revision over the past 30 days. The company’s shares have risen nearly 40% so far this year. At present, it has a Zacks Rank #1.
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