Fintechs may be the apple of venture capitalists eyes but they won’t be transforming the financial services market alone in 2020. They will have some of the nation’s biggest tech companies to contend with.

Fintechs may be the apple of venture capitalists eyes but they won’t be transforming the financial services market alone in 2020. They will have some of the nation’s biggest tech companies to contend with. 

This year has been all about the financial technology startups that raised hundreds of millions of dollars in venture capital, some now sporting valuations of more than $1 billion. These fintechs have been busy disrupting everything from banking to investing, landing millions of customers along the way. Some have out grown the traditional players, forcing entire industries to waive fees and slash commissions. That hasn’t been lost on technology companies, which began testing the waters in 2019.

Take Apple. It entered the financial services market earlier in 2019, teaming up with Goldman Sachs in August to launch the Apple Credit Card. Apple has been tight lipped about its performance since then but David Solomon, Goldman Sach’s CEO was quick to tout the success of the Apple Card’s launch this summer. 

Then there’s Google. In November the Wall Street Journal reported its gearing up to roll out checking accounts in 2020. Code-named Cache, Google is reportedly working with Citigroup and Stanford Federal Credit Union to make that a reality. 

Facebook and Uber are also eyeing the market. Facebook is in the throes of trying to drum up support for Libra its cryptocurrency and Uber has a credit card and recently created a new unit Uber Money to go after digital payments and other financial services.

“Many tech companies are embedding financial services into their products, and this trend will not be slowing down any time soon,” said Ramneek Gupta, Managing Director & Co-Head of Venture Investing at Citi Ventures. “Fintech will soon become a native component of how companies operate, and we’re already starting to see that shift with products like Uber Money.” That means the new year should bring further announcements on the part of big tech centered around financial services. It may come in the form of product launches, partnerships and/or acquisitions. 

The fintechs may be enjoying red hot growth but the interest on the part of tech companies should give them pause. These tech companies have huge amounts of cash in the coffers ready to direct toward fintech services. They also realize the stakes are high. The tech companies see financial services as a way to help customers spend more whether it’s buying gadgets through Google Shopping or more rides with Uber. It also gives the tech companies deeper insight into the financial behaviors of their customers and their purchasing choices. That can be powerful when courting advertisers. 

With so much to gain and with tech companies sitting on mounds of cash it won’t be too surprising to see them offer banking, wealth management and insurance putting pure play fintechs at risk. If consumers can get everything from a Google or an Apple they won’t need a separate mobile only bank or digital insurance provider.

Donna Fuscaldo

A journalist for more than fifteen years, I am a freelance writer reporting on personal finance, entrepreneurship, investments, fintech and technology for a variety of media outlets. What sets me apart from my peers is my ability to take complex topics and explain it to the masses. After years of covering the equities markets as a technology reporter and special contributor to the Wall Street Journal, I embarked on a freelance career providing my readers with invaluable advice on everything from investing to landing a job. With the intersection between personal finance and technology getting blurred, cutting through the fintech noise and getting to the bottom of the story is becoming increasingly important to readers around the globe.

“In 2020 I think we’ll see fewer companies and entrepreneurs using the ‘move fast and break things’ model. While this ideology has never worked in financial services, we’re seeing that it is having continued negative repercussions for big tech,” said Citi Ventures Gupta. “With privacy and regulation becoming a top concern for consumers, more companies will be pumping the breaks before launching into new business plans.”Get the best of Forbes to your inbox with the latest insights from experts across the globe.Follow me on Twitter

That’s not to say it will be completely smooth sailing for these tech companies as they navigate the highly regulated financial services industry. As some of the leading fintechs have learned it’s not always so easy to offer financial products and stay within the confines of regulations. Tech companies have an added layer to that. They are under intense scrutiny by regulators and lawmakers over how they handle data. That could hurt their ability to offer financial services. Facebook’s woes with Libra are a cautionary tale of what could go wrong. With lawmakers and privacy groups already worried about how Facebook handles data there has been immense push-back to Libra. That’s resulted in Visa, Mastercard, Stripe, eBay and PayPal quitting the Libra initiative.

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