So it’s here. The first big tech financial services product. The Apple Card. Except of course it isn’t the first. Amazon lends money, Google has GPay, WhatsApp’s payments trials in India seem to be proving a big success. And Apple already has Apple Pay. That said the Apple Card does feel like an important moment in the long road of big tech coming into financial services, and no doubt everyone from fintech starlets to big incumbent banks are feeling a little uncertain about what this might mean for them.
The power of Apple’s brand, fanbase, and IOS-backed distribution network means the Apple Card will have a significant head start on the competition, but success is by no means guaranteed, and the comms challenges in particular are some of the most important to overcome. Below are three key comms questions, the answers to which might determine the eventual success of the Apple Card, and Apple’s role in financial services more broadly.
How successful will Apple’s data privacy campaign be in winning public trust?
The move into financial services is where we’ll really see if Apple’s lean into privacy has paid off in terms of reputation. For a decade the financial services and fintech industries have talked about the slow rumbling of big tech over the horizon, ready to come and compete on the same turf. But the tectonic plates have shifted a little over the last eighteen months. Data privacy scandals have pitched big tech companies against both regulators and the general public. Big tech is no longer idolised in the same way and, more importantly in the financial services space, no longer trusted.
Apple’s business model being fundamentally and significantly less reliant on personal data has meant the business has been able to distance itself from other tech giants by talking and acting a strong game on data privacy. From public fallouts with law enforcement, to big advertising spend, Apple is making it clear they’re on your side.
The Apple Card will be a big test of the success of this approach and could offer a clear commercial advantage for what might have been perceived as a non-commercial, brand-led campaign.
Why would I want an Apple Card?
If the card looks a lot like a white version of a Starling card, the app looks an awful lot like Monzo, as does the list of key product features. Not surprisingly Monzo Twitter was lively in response, with many unsure whether to be flattered by the imitation or perturbed by the new competition. The reality is that in the US the Apple Card as a product might feel like a step forward, but here in the UK, it looks a lot like Apple is playing catch-up. We’ve had all these features for years.
It’s certainly not unusual for Apple to enter a market after others have beaten them to launch; but it is a little unusual for them to come in with virtually zero big ticked product advantages over the current product leader.
Winning Apple Card customers in the UK (assuming they bring it over the Atlantic) might come down to something beyond product.
The partnership with Goldman Sachs could point to the Marcus strategy on savings accounts, which was simply to win on price. The financial services market is a highly commoditised space, and so finding a way to be top of the list does win customers. Of course, that approach doesn’t fit with the usual Apple strategy of premium products for premium prices.
So, another approach could be to win on design. This would be very much home territory for Apple. The all-white look of the card is certainly striking enough to echo the success of design wins with everything from the early iPod to today’s AirPods. Pulling out your white card to pay in a restaurant is going to be a genuine pleasure for those ‘early adopters’. However, if card design is really to make a difference, how can that sit with the stated idea that the entire product is built around the optimal use case of paying with Apple Pay? That means the product is built to work best when nobody even sees the card.
Customer acquisition in the UK might just involve Apple having to stray a little from their typical strategies.
Can Apple make financial services inspiring?
The room was big and full, there were celebrities ready to get on stage, and that familiar crackle of intrigue buzzed around the room (at least as far as I could tell from a live stream!). This was a big-ticket Apple event. We’ve seen them before, and we’ve genuinely seen them change the world before. The excitement before these events can be justified, if a little nauseating. So, with all the pomp and circumstance, it was actually quite jarring to hear interest rates and cashback rewards paraded on stage at an Apple event.
No matter what the industry might tell itself, financial services is really boring. It’s so boring people actively put themselves in harm’s way just to avoid engaging with it.
No one goes to an Apple event to hear about an extra one percent back on their spending. That’s what you expect from a supermarket chain lending its brand to a bank. You go to an Apple event to see them blow the doors off with new products, beautiful design, and game-changing technology.
Sure Apple has a huge and engaged audience to push products at, but selling that big white dream in financial services is going to pose a whole new challenge for the world’s most recognised commercial brand. It will take some feat of creativity to get to the point where we hear Sir Jony Ive’s soft spoken voice over the standard Apple product marketing video rhapsodising the transformative nature of Apple’s cashback rewards system paying out daily, rather than monthly.
The act of inspiring change in the way people manage their finances would be one of the Apple brand’s greatest ever achievements.