Google Bank – a prospective global player in financial services?


Google is founding its own bank. It might sound strange, but it actually isn’t all that unrealistic according to a scenario compiled by the Handelsblatt (Commerce Paper). In fact, the corporation has had a European banking license for some time now. But it has kept quiet about any concrete plans. Financial experts, however, are aware of the resources Internet companies such as Google, Apple and Microsoft have at their disposal: know-how, technology, the necessary capital and a wealth of customer data – a great basis for starting up a bank.

“Due to their huge foundation of data, these companies know much more about customer demands than banks ever will. As a result, they can offer targeted services”
Deutsche Bank co-CEO Jürgen Fitschen in an interview with Börsen-Zeitung, a German daily stock market newspaper.

The Internet giant made its first daring step into the financial world in 2011, with Google wallet. At the moment, the wallet is only accepted as a payment method in the US. Despite that, the corporation has been able to use this move to make a name for itself in the mobile payment sector.

Commerce between uncertainty and stand-alone solutions

The Google example highlights the fact that the mobile payments ecosystem is in a constant state of transformation, or even still taking root. Many new providers are entering the market with mobile payments solutions. What’s missing are the standard solutions: technologies that can be implemented across a number of providers. Accordingly, retailers are uncertain, and out of fear of making the wrong decision, they are hesitating to make decisions at all. Others are busy tinkering with stand-alone solutions. But in the long run, the myriad of solutions is only complicating the situation and confusing customers.

Cooperation offers potential for new market leadership in the mobile payments ecosystem

In the end, it’s about getting the customers on board. They want solutions that can be applied anywhere and are just as straightforward as cash or credit card payments. Moreover, these solutions have to deliver added value in terms of payment convenience and security. Only then will customers be prepared to accept additional costs.

The Mobile Business Ecosystem (Infographic)
The Mobile Business Ecosystem (Infographic – click to enlarge)

What does this mean for the traditional world of finance in Germany? If corporations like Google, Apple or Microsoft actually take that leap into the finance sector, could the traditional players lose their “top dog” positions and be forced out of the mobile payments ecosystem altogether? Now is the perfect time for these players to forge suitable partnerships and pursue close cooperation. This could reduce development costs significantly and facilitate expansion and acceptance on the mass market. From the customer side, this would bridge the gap between the traditional world of payments and the opportunities presented by mobile business – something Google will have to start competing with.