Apple's High Yield Savings Hits $10 Billion Changing Finance

The lines are getting blurred.

Apple is one of the most recognized technology companies in the world. It is a brand that most recognize. We are also looking at one of the largest based upon market capitalization.

While the company has it detractors, it is hard to argue to the success over the last 20 years. It went from a niche computer manufacturer to dominating the consumer electronics sector, at least in terms of profits.

This is not the end of the story though.

Apple is looking to enter a new arena and it isn't alone.

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Technology in Finance

We are seeing a new concept applied to FinTech. No longer is this technology generating applications that can rival the traditional financial institutions. Instead, we are looking at technology

Apple ruffled some feathers by offering a high yield savings account. This was able to garner some impressive sums of money in a short period of time. It is evidently something that keeps growing.

We now are looking at the total funds in the Apple savings account topping $10 billion.

The account is paying 4.15% and is done through a partnership with Goldman Sachs. We see how there are still financial intermediaries being involved but it is getting closer to changing.

Elon Musk is open about his desire to create, in his words, the largest financial institution in the world. This gives us insight in where he is thinking. As stated in the past, Twitter (X) is not a social media platform. It is not what Musk looking at.

He has his eyes set in the same area as Apple.

Technology companies are going to keep entering finance.

Banks Under Attack

Even without putting cryptocurrency in the equation, we can see how finance is going to really affect the traditional financial institutions, especially banks.

We saw how FinTech affects much of the financial sector. Piece of the industry, like mortgage origination were taken over by application. This effectively removed the banks from the process.

What we are seeing now is an order of magnitude worse. This is not targeting financial services but, rather, the flow of capital. When money is removed from the banking system, especially depository institutions, it affects that sector's ability to provide basic financial services.

Regulations will help to protect the banks for a while. However, mega-technology has a major advantage: they have a ton of money. They are able to buy their way into the game. A company like Apple could buy a good sized bank with just the cash (and equivalents) on hand.

Here is where we see the power of these institutions. Another thing they have going for them is they developed ecosystems around their platforms. With hundreds of millions of users, this makes the banks' customer bases look small.

Apple is opening the door to something much bigger. It is foolish to believe they are going to be done with just a savings account.

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Posted Using LeoFinance Alpha