When Facebook announced back in June that it was planning to launch a new brand of cryptocurrency, the idea of a major tech company wandering into the financial services arena still seemed unusual.
But that was two months ago. Facebook has apparently dialed back its plans, but that isn’t stopping the tech industry from pushing the boundaries of its traditional market and expanding into financial services.
What does this mean for technology executives and leaders? From my perspective, it means we need to prep for more conversations with the C-suite and corporate boards on the topic of the accelerating convergence of tech and finance. Clearly, this isn’t a fad or a blip. I predict this will be a transformational change that impacts huge segments of our industry.
The latest and most significant development in this trend is the announcement of a new co-branded credit card by Apple and financial titan Goldman Sachs.
“Apple and Goldman have spent the past few months preparing their co-branded credit card, which will offer 3% cash back on Apple purchases. In new terms disclosed this week, the companies said Apple Card customers also will be offered separate financing plans for certain purchases, in addition to the ability to carry a revolving balance,” write Mark Gurman and Jennifer Surane of Bloomberg.
The credit card will be unveiled this month, Apple Chief Executive Officer Tim Cook confirmed last week. Apple also ended its longstanding rewards card program with Barclays in advance of the new card’s introduction.
“Goldman Sachs is providing Apple with the software tools for Apple Card, while Apple will provide the service inside of Apple Wallet app. The card can be used by tapping an iPhone at a payment terminal, or by using a physical card made out of titanium that Apple will also ship,” writes Todd Haselton of CNBC.
Apple’s decision to partner with Goldman Sachs offers a blueprint for future ventures and alliances. Each party in the deal brings expertise, strength and credibility to the table. Unlike the Facebook plan, the partnership between Apple and Goldman seems carefully conceived and fully developed.
As a technology leader, this feels like a good move in the right direction. I predict that many of us will find ourselves exploring similar opportunities for partnerships between tech and finance in the months and years ahead.