Alphabet Inc. (NASDAQ:GOOG) Coming for Your Checking Account
Google is the latest tech company interested in gaining a deeper foothold in financial services. The Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary is expected to launch a checking account next year, partnering with Citigroup and Stanford Federal Credit Union.
There’s a lot to gain for Google. Checking accounts can provide valuable insight into consumers, including their income, where they shop, and how much they spend. Google won’t sell users’ financial data, executive Caesar Sengupta told The Wall Street Journal. Of course, Google doesn’t sell data at all; it merely uses it to target advertisements. That said, Sengupta pointed out it doesn’t use data from its mobile wallet Google Pay for advertising purposes.
Still, a deeper relationship for Google with people’s finances provides several opportunities for the company, and it could help it compete with Amazon (NASDAQ: AMZN) and Facebook (NASDAQ: FB), both of which have increasing insights into how consumers are spending their money.
Getting in consumers’ wallets
One of the biggest advantages Amazon has over Google and Facebook is direct access to its users’ shopping history. It extends that data mining with its credit card and by incentivizing Prime members to scan an app at Whole Foods. All that data allows Amazon to surface relevant product recommendations, craft promotional offers, and tailor services to get customers to spend more on its website. Amazon also has concrete measurement data to show advertisers, which is a key differentiator between it and Google or Facebook.
Facebook recently updated its payments service with a focus on increasing commerce across its various platforms. It explicitly said it will be using data for its advertising business.
Google might not be as aggressive with the data it gleans from consumers’ new checking accounts. Sengupta said it plans to use access to people’s wallets to bring value to consumers, banks, and merchants, with services that could include loyalty programs.
That could look similar to Square‘s Boost cash-back program, something that’s starting to become an advertising product instead of a customer acquisition tool. While Google might not use data from its checking product to target advertisements, it might use the data from users’ other online activity with Google to target offers in the planned checking account. It could use consumers’ spending behavior to measure effectiveness for merchants.
Don’t be so sure Google won’t use data for online advertising
Sengupta’s word choice is key when he said the company won’t “sell” users’ financial data. Pretty much every bank uses its consumer data for marketing. That may be something like sending targeted credit card offers or other financial services like life insurance.
Google is more than capable of emulating that kind of marketing and bringing it into the digital age. It has nine products with over a billion users, which means you probably interact with at least one Google product on a regular basis — perhaps daily. And customers signing up for a Google checking account product are much more likely to be fans of Google’s other products. All this is to say, Google has a lot of access to its users to make the marketing efforts seen from traditional banks more effective.
While consumer financial data might not feed into the ads users see in Search or on YouTube, it wouldn’t make sense for Google to invest in developing a new product without plans to leverage some of its biggest assets with its core competency: digital advertising.
Facebook is upfront about how it uses payment data. Amazon isn’t trying to hide the fact that it collects and uses your shopping data, either. Google shouldn’t be any different.
Consumers practically expect tech companies to harvest their data anyway. Even so, some 58% of respondents in a recent survey from McKinsey & Co. said they would trust financial products from Google. That’s better than Facebook (31%), but not quite as good as Amazon (64%). Google would be doing itself and investors a disservice if it didn’t use data from its banking product for advertisements.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1,246.23.
The projected upper bound is: 1,361.57.
The projected lower bound is: 1,284.48.
The projected closing price is: 1,323.03.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 80.1825. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 65.96. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 117.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 24 period(s) ago.
Rex Takasugi – TD Profile
ALPHABET INC C closed down -14.170 at 1,320.700. Volume was 8% above average (neutral) and Bollinger Bands were 2% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1,306.71 1,248.62 1,180.51
Volatility: 17 20 30
Volume: 1,313,507 1,326,812 1,432,930
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
ALPHABET INC C is currently 11.9% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of GOOG.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GOOG.O and have had this outlook for the last 23 periods.