Business Technology

Tuesday 15 October 2019

Fears Fang tech giants moving in on banking

Royal Bank of Canada’s Dave McKay. Photo: Bloomberg
Royal Bank of Canada’s Dave McKay. Photo: Bloomberg

Jenny Surane

Royal Bank of Canada's Dave McKay is feeling the bite of the 'Fangs'.

The lender's CEO told investors yesterday that he's increasingly worried about the so-called Fang companies - Facebook, Amazon.com, Netflix and Google parent Alphabet - getting into banking.

The companies are already inserting themselves between the bank and its customers as people increasingly turn to the technology giants when shopping for financial services, McKay said.

"They are getting between us and the moments of truth of our customers, and currently what they do with that is they sell that insight back to us in the form of search and advertising and other perspectives, and they earn a certain amount of economic rent," McKay said at the RBC Financial Institutions Conference in New York.

The amount of money tech companies are seeking from banks "is growing," he said.

The finance industry has become increasingly concerned that major tech companies might try to sideline banks by handling more of their customers' payments, offering loans or accepting deposits - even if those services open them up to more regulation.

McKay said his goal is to build out services that allow Royal Bank to be a bigger part of a customer's life before they have to make a financial choice. "I do get calls from the Fangs after I do these events," McKay said.

"Moving higher up in the funnel of decision-making and life moments before the financing decision or before the banking decision is mission-critical in us taking control in that journey and not being beholden to somebody else's platform."

Bloomberg

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