If the traditional banking industry was waiting for a sign that Big Tech’s threat looms larger than ever, Apple’s launch of a game-changing savings account via Goldman Sachs may be it. 

With 4.15% annual percentage yield, no fees and zero demand for a minimum deposit or balance, the new Apple Card savings account – which users can set up from the Wallet app on their iPhones – is arguably the most audacious move yet at the frontier of Silicon Valley’s push into finance. 

It means that the world’s 1.5 billion iPhone owners can potentially turn to Apple for a full suite of personal finance needs, including Apple Pay Later, Apple’s take on Buy Now Pay Later, and Daily Cash, the Apple Card’s popular rewards programme which offers cash back on purchases. It’s a formidable prospect, adding further pressure to a fast-evolving picture that also includes last year’s Amazon Insurance Store debut, as well Google Wallet’s growing global presence.

Common to all these recent forays is that they recognise the consumer’s insistence on peerless UX that is simple, intuitive and unobtrusive. By embedding banking and finance into their own proven models, rather than becoming banks per se, Big Tech is encouraging a shift away from product to a mindset that is inherently consumer-centric.

Here’s what businesses eyeing the embedded finance market can learn from Apple’s bold strategic bid:

Apple wraps customers’ financial needs in its own brand promise. 

From a seamless savings dashboard to unlimited Daily Cash earnings, everything about the new Apple savings account is in keeping with Apple’s brand promise around delivering exceptional customer experience. Embedded banking allows Apple to trade off consumers' trust and reliance on its brand to offer them payments, lending and saving in a way that is smooth, intuitive and useful. Apple’s approach provides consumers with a familiar “walled garden” ecosystem rather than directing them towards third-party financial services – whose values and user journeys might not meet the same mark.

Apple is the face of banking without the baggage. 

A critical takeaway from this latest manoeuvre is that Apple is not seeking to become a bank itself. Why would it? It doesn’t want to apply for a banking licence, or get bogged down with regulatory complexities. By partnering with Goldman Sachs on its embedded banking strategy, an established legacy player handles the backroom banking functions. This frees up Apple to extend its relationship with customers through well-designed and delivered Apple-branded financial products.

Interestingly, this partnership is happening at a point when Goldman Sachs is retreating from the consumer finance market. The result is a well-oiled machine in which each party sticks to its area of expertise and strength.  

Embedded banking allows Apple to ship more products. 

Introducing embedded banking  into the mix allows Apple to sell more iPhones and ship more inventory, because it provides customers with an easy way to manage their finances and pay for products. Apple’s strategy is to lock its customers further into its ecosystem; customers can only apply for an Apple savings account if they have an Apple credit card and they can only have an Apple credit card if they have an iPhone. Because Apple also owns the hardware and the operating system, it’s able to promote and link its financial products so that it’s more convenient for Apple iPhone customers to opt for Apple’s financial products than a competitor’s. 

Apple’s embedded banking offer rethinks financial services from the customer’s point of view. 

Apple’s 4.15% savings product suggests the company has really thought about its customers. With interest rates at a record high, and banks are not delivering on their promise to support consumers, there is an opportunity for other players to offer similarly customer-focused savings products. This means developing a showcase of beautifully designed and delivered financial products that align closely with user needs at any one point in time. It’s not so much a case of changing the rules, as of tearing up the playbook.

Final thought

Apple’s entry into embedded finance is a freeze frame moment in a sector expected to exceed $7 trillion by 2026. Watching from the sidelines, businesses with high brand equity across all sectors, should be looking to develop embedded finance products that closely align with their own brand values and customer requirements (including specific insure, borrow, save or pay needs).