When Apple first launched the Apple Card earlier this year, it attracted widespread attention, not least because it showed that the US tech giant wanted to make waves in financial services. But according to executives at a Russian bank, Apple Card has few other features than what it appears to be: a credit card and a digital wallet that supports it.
“This is another credit card with some innovative features,” David Rafalovsky, chief technology officer at the Reserve Bank of Russia, said at the East Tech West event. It’s very popular in the market and I’m glad it happened like this. But this is another credit card. ”
Apple’s move into the banking sector has been a big welcome because of the fast-track application process and a 3% cashback on certain goods and services. But the cards were actually issued by Goldman Sachs because Apple does not have its own banking licence.
Apple isn’t the only company trying to challenge retail banking. Google recently said it plans to provide checking accounts and work with Citi and a U.S. credit union.
On the other hand, established banks have been working and investing with smaller fintech rivals to counter threats from big technology companies.
Mr Lafalowski said he challenged everyone to “give me an example of a breakthrough innovation in consumer banking” and was a fierce attack on Apple and some of the fintech upstarts.
The head of technology at the Russian Federal Reserve uses Italian food to prove his point.
He says both good and bad restaurants use the same ingredients and recipes to make food, and banks and fintech companies “invest more or less in the same ingredients”.
“How do you innovate if everyone is using the same ingredients?” Lafalowski added, “What makes your final product better than your competitors?” ”
Financial institutions should focus on the “intersection of financial and non-financial services” and put customers at the centre of product development, he said.