Apple has considerably more global reach and consumer trust than most banks. Is it any wonder, then, that it is slowly but surely turning into a financial institution?
One can argue about whether a marriage between Big Tech and big banks is a good thing for competition. But Apple does appear well placed to solve some of the problems that have plagued traditional banking for years. Take the BNPL programme, for example. The company actually funds the loans largely from its own balance sheet, which had a hefty $165bn in cash and marketable securities as of the first quarter of 2023, with total debt of $111bn. This ratio sits in contrast with most banks, which do their daily business with 90 per cent or more borrowed money. Much of that debt consists of deposits and short-term loans that can be withdrawn quickly. This is what we witnessed during the SVB meltdown, which saw investors try to take $42bn out of the stricken lender in a single day.