What Google Banking can teach us about The future of finance and tech

It’s time to rethink the relationship of the large tech companies to financial services.

I used to echo that the Western tech companies are powering the “attention economy”, pulling in users into a walled garden that competes for hours in the day with other tech companies. The core of this thesis is that media consumption is the hook into people’s lives, and that addiction to techno-dopamine keeps them engaged with Instagram, WhatsApp, and TikTok. Thus Trump swiping at TikTok in a nationalist zeal.

The core chart for the thesis is below:

It says, welcome to your smartphone for 4 hours a day. More than television consumption, and certainly far beyond radio or gaming.

But I don’t think it’s right anymore to say that media is how we drive commerce. It is a drug in the mix for sure, but it is not the main cocktail.

What we learn from Eastern tech companies is that finance can be at the center. Is Tencent, the owner of TikTok (almost banned in the US) and WeChat (banned in India), a video gaming company, a social media company, or a payments company? Or a digital yuen company? Or a national blockchain infrastructure provider company? The same can be asked of Alibaba, Tencent’s alpha competitor.

While there are plenty of drugs — in the form of games and speculation — in these Eastern systems, they are underpinned by other themes. Those can be commerce and shopping, like Amazon. Or they can be payments, like Square and PayPal. Or micro-credit and business lending, like Affirm. And further, they can be wrapped into the geopolitical narrative of de-dollarization that has now become a necessary survival tactic. See below for an example of Russian/Chinese trade settlement decreasing form 90% USD-based settlement in 2015 to <50% by 2020. The CBDC efforts we see China exploring are reportedly part of the same economic logic.