Google, Walgreens and H&R Block want to be your bank | Business

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Chanelle Bessette

When you think of Google, Walgreens, or H&R Block, what probably comes to your mind is searching the web, taking a prescription, or doing your taxes – not writing checks, building a fund. emergency or set up automatic bill payments. But these companies are part of a growing trend of non-bank brands offering banking services.

The provision of banking services offers retailers, brokers and other businesses another way to interact with customers, with the goal of retaining them and keeping them longer in their ecosystems. For customers, this can mean more convenience and a better technology experience, but also additional costs and the potential for confusion.

To be clear, these companies don’t actually become banks. This would require obtaining a banking charter – a process that can be long and expensive and subject the company to additional regulatory scrutiny, says Francisco Alvarez-Evangelista, associate researcher at Aite Group, a financial services analysis firm. .

Instead, they partner with existing banks that are licensed and regulated and offer federal insurance for customer deposits. Partner banks assume regulatory and security responsibilities and ensure effective management verification, savings and other accounts, while businesses focus on branding, marketing and customer engagement.

About Janet Young

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