Google, other techs will disrupt banking without ever becoming a bank, Forrester says

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Google will likely never become a bank for a variety of reasons, according to a new Forrester Research report. Among the reasons: bank regulatory compliance is costly; the company might not want to compete directly with banks who are among its top advertisers; and finally, "It's not another bank that people want," writes Forrester Research analyst Oliwia Berdak. But Google and others like it will likely disrupt banking just the same by blending mobile payment with other popular services to reach and serve customers. Berdak notes that her colleague and Forrester analyst James McQuivey has argued that Amazon did not set out to disrupt the music industry but rather to engage customers more frequently. With services like Gmail, Google Maps, Google Play or its hallmark search engine, Google will more likely leverage its existing consumer reach, its big data processing abilities or other tools to provide services firms would have wanted from banks but never thought to ask for. "The future of Google's financial services lies in the integration and leverage of the firm's other products to create new customer value that goes beyond payments," Berdak writes. Banks shouldn't look for competition down traditional financial avenues she warns, because "digital disruptors like Google are disruptive because they don't play by the rules."