Next: Google, the bank?

Angus Kidman
Monday, 27 November 2006 08:33

Your IT - Home IT

You can add the banking and finance sector to the growing list of companies -- from book publishers through to Microsoft and major TV networks -- which are worried that search engine giant Google is about to muscle in on their turf.

At a conference for finance professionals held by Forrester Research in London last month, the dominant question on everyone's mind appeared to be whether Google's vast store of information about consumer search habits, email and content might allow it to enter the ultra-competitive consumer finance market, where detailed information on individual customers is widely viewed as essential in order to successfully sell products.

Asked if Google represented a threat to banks, Joseph DiVanna, managing director of consultant Maris Strategies, didn't offer much in the way of comfort. "If you think about the footprint that Google has, it's big," he said. "It's the same kind of footprint that we had in retail [banking] years ago with branches. I think Google is a force to be reckoned with."

The company's Google Checkout payment service already places it in competition with pseudo-banking operations such as eBay's PayPal. A Google-branded bank might be particularly appealing to younger consumers, whose expectations of financial services have been shaped by easy access to Internet-based services.

"We're seeing the very early stages of a fundamental shift in how people are banking and commissioning transactions in the world itself, and Google is catering to that group of people who are going to inherit the next wave of wealth." Maris said. The ability to draw together data from disparate sources would also be important: "Customers want to aggregate many [financial] relationships together."