Prepaid and banking services provider Green Dot announced today that is has opened a technology subsidiary in Shanghai. Its goal is to have the ability to bring new technology to the financial services market in a shorter timeframe.
Green Dot’s presence in Shanghai, which is both a global financial hub and China’s biggest city, is part of Green Dot’s long-term strategy to invest in infrastructural excellence and efficiency as a competitive advantage and a way to achieve greater levels of productivity and margin expansion, leading to increasing shareholder value over time.
Having coders on staff likely will make it easier for Green Dot to develop new technologies like its mobile banking app, GoBank, which it brought to market as a virtual checking account. The company has had technology ambitions before, as evidenced by its purchase of the EcommLink processing platform. While that attempt to develop its own processing platform did not pan out, having a dedicated technology shop could go a long way to ensuring the success of similar endeavors in the future.
As a bank holding company, there may be a question raised by the regulators of having technology work done in China. While the company has likely already taken steps to ensure the security of clients’ data, it will need to be prepared to demonstrate the safeguards it has in place.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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