Banking Consultant Nuciforo: Google is ‘Biggest threat’ to banking industry
By Michael Kling, Moneynews
Google is threatening to disrupt the banking industry in a big way.
Its products, including Search, Shopping, Offers and Wallet, are a virtual slap in the face for banks and PayPal when they are integrated with Google Glass. Combined with Google Glass, they could be a knock out punch, writes banking consultant Michael Nuciforo in an article for American Banker.
Nuciforo envisions this scenario: You’re in Wal-Mart and want to buy a television. You just say, “OK, Glass, tell me my balance,” and “OK, Glass, purchase that television.”
Glass determines the type of television, then uses Google Shopping and Search to find the best deal and finally you buy it with Google Wallet. In other words, Google helps separate the consumer from his money, but also separates the bank from its customer.
“This presents an absolute horror scenario for banks,” says Nuciforo, a former head of mobile banking at Royal Bank of Scotland.
If you link your Google Wallet to your checking account, you no longer need to interact with your bank.
“This means the complete dilution of the customer relationship,” he says. “Customers then stop logging into Internet and mobile banking and banks miss out on the opportunity to cross and upsell products.”
The only thing that could be worse for banks would be Google launching its own virtual currency or obtain a banking license to take deposits, Nuciforo notes.
“Google presents to me the biggest threat to banking today: a giant, multinational, technology-based company, with strong customer advocacy,” the consultant warns. “It has all the essential ingredients. Google could do to banking what Apple did to music, or what Amazon did to print.”
For Google, the point is not to smash banks but to collect data to prove how valuable its advertising service is to merchants. Data on payments could help it improve its other services.
“By playing a more prominent role at the point of payment, Google can close the loop with advertisers.”
The Atlantic Wire called Google Wallet, which allows Gmail users to attach money to emails, a plan to destroy PayPal and cash forever. Google, it says, has “a multi-pronged plan to integrate Google Wallet into every aspect of your shopping life.”
If Google is successful, consumers will be able to make purchases both online and offline, without a physical wallet. Purchases flow through Google, and receipts will sit in shoppers’ email, making consumers even easier targets for advertisers.
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