Big Tech poses a significant threat to established financial services companies with biometric payments products, according to a new report.
GlobalData’s Future of Financial Services report examines how disruptive technologies such as AI, cryptocurrencies, and quantum computing are impacting the financial services industry.
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Over the past two decades, Big Tech companies have have set their sights on payments products within financial services. Various companies have launched financial products such as buy-now-pay-later schemes and mobile wallets.
As Big Tech looks to create super-apps incorporating marketplaces, financial services will integrate directly into these platforms.
Both Amazon and Apple have launched retail banking products, but GlobalData warns that the companies may face regulatory challenges in doing so.
Biometric payments as standard
As new technologies disrupt the industry, one of the most significant advancements in the financial services sector is the capacity for biometric payments.
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By GlobalDataAccording to the report, biometric payments will be mainstream by 2035, with traditional financial institutions becoming more involved in utilising the technologies.
By 2035, financial services companies will be utilising biometric-based national IDs from payment authentication, with retailers installing biometric scanners such as fingerprints, facial recognition and iris scanners at point-of-sale terminals. This payment method will replace traditional methods like cards and PINs.
While many presume that privacy and anonymity may be a concern for consumers when making payments, GlobalData’s Financial Services Consumer Survey showed that respondents value simplicity and speed significantly over other factors such as privacy and anonymity.
Notable companies identified by GlobalData in the biometric payment space, highlighted by the report are IDEX, Zwipe and ADIB.
Google most likely to lead the way
According to GlobalData, Google is the Big Tech company most well placed to disrupt financial services, due to its global reach and established brand.
In 2006 the company launched Google Checkout, followed by Google Wallet in 2011 until it was succeeded by Android Pay. Later, the two merged to become Google Pay in 2018, but since has undergone another name change back to Google Wallet.
While further plans for Google to enter financial services have been laid to rest, GlobalData’s report predicts that with an improving economic environment, Google may begin targeting independent banking services once more.
