Google is unlikely to launch a traditional bank because of the associated costs and regulation, according to a new report from research firm Forrester. Instead, Google will likely become a hub for financial services, facilitating relationships between consumers and financial service providers.
According to report author Oliwia Berdak, this will cause disruption in the areas of payments, money management, product comparisons, and financial advice. Despite Google’s best efforts, including the launch of its own mobile payment wallet, user uptake has been sluggish to date.
Forrester posits that the future of Google’s mobile payment services lies in the integration and leverage of other product lines such as Google Maps, Gmail, Google Play, and Google Now. Forrester also predicts that Google will turn its attentions away from in-store payments in favour of a digital wallet service that encompasses the whole consumer purchasing process.
“In retail financial services, developing a better global payment network, providing affordable financial advice that millions of customers desperately need or simply getting access to transaction data are all sufficient motivations for firms like Google to get involved,” says Berdack. “For a firm that uses information to solve problems, a logical next step is to use product, consumer and transaction data to deliver financial advice and tailored product recommendations. Google won’t become a bank – it’s not another bank that people want – but it could easily become a financial services hub to facilitate the relationship between consumers and providers of financial services.”