Google won't launch a traditional bank because of the associated costs and regulation, but these hurdles won't stop the firm from redefining the future of financial services, according to a new Forrester report.
The report, written by Forrester analyst Oliwia Berdak, postulates that Google will likely become a financial services hub that facilitates the relationship between the consumers and providers of financial services, causing disruption in four areas: payments, money management, product comparisons, and financial advice.
"Google's reputation as one of the most disruptive firms in the market, have left many digital financial services executives worried about a potential new rival: Google Bank," writes Berdak, in a blog post. "Unfortunately, they're asking the wrong questions."
Google's forays into mobile payments have so far yielded less than stellar results, with its Android-powered Wallet undergoing multiple iterations in an effort to gain some traction with consumers.
Forrester maintains 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. In fact, Forrester sees Google focusing less on in-store payments and more on building a comprehensive digital wallet for every stage of the purchasing journey.
"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."