As we will see in this article Google already has everything necessary to be a Fintech in the immediate future, here we will explain it and analyze its consequences.
What is a Fintech
The word Fintech comes from the combination of the English words FINance (finance) and TECHnology (technology).
A Fintech is a bank that, unlike traditional banks, has no branches or physical presence but operates through the cloud, offering the same products and services as a traditional bank (or almost) and creating other services, or forms to provide those same services, innovative through current technology, as automated advice for financial products, for investment funds, for pension plans, etc. and offering its clients innovative ways of controlling and saving their funds, such as creating budgets and accounts set aside so as not to have the money available. In addition to lower costs because, having no branches, can offer many of their services for free.
With the economic crisis we have suffered recently and the bankruptcy of some financial institutions, especially in the US, the birth of these Fintech and its initial development has been somewhat slower than what could be expected but, despite this, there they are and they seem to have a very promising future.
A great advantage of this type of bank in the European Union is that, thanks to the implementation of the European Payments System (SEPA), a bank that obtains a license in any of the EU countries can operate throughout the territory of the Union. exactly the same as the national banks of that territory, offering the same products and services including those of collections and payments of all kinds.
With these entities, in addition to these services and automatic advice on the Internet, we can have the traditional ones such as financing (loans, credits, discounts, mortgages), payment by transfers, cards (debit, credit, contactless, etc.). .), enter and dispose of money through ATMs, etc.
This is how Fintech Europeans have already appeared, such as the German N26, which already has all the services and can provide us with an IBAN if we open an account in it or others that are still being implemented but already offer financial services through other operators such as the English Revolut or the Spanish Bnext.
Google as Fintech
For some years Google has already provided certain payment services through the Internet and the Smartphone using some kind of support from another entity, such as a card, through Google Pay, in a similar way to other online payment platforms such as Paypal (which , by the way, can be linked to Google Pay).
Now, Google has obtained a license to operate as Fintech in Lithuania, a country that belongs to the EU; As such, it can provide almost all the services normally provided by a bank, such as collecting and paying by all means, issuing electronic money, having deposits from its clients that can enter and withdraw money, and practically everything else except that, At the moment, it will not be able to offer loans, credits or mortgages, nor will it be able to create or operate with investment funds of any kind.
As we explained in the previous point, Lithuania is a country that belongs to the European economic area and, therefore, Google’s license for these operations is valid throughout the territory of this space (the entire EU and some countries added), for what will be able to offer these products and services here in Spain and in any other country in Europe without any problem; the only step that remains is to start offering them.
Posible problems
The great danger that Google has become a bank is that this American company is already a financial giant, which has an information control of millions of users and, as a result of this, has a position to compete with other Fintech and with other banks too powerful.
On the other hand, for the customer of Google as a bank, the one that an Internet search engine that already handles abundant information about us has, in addition, our bank account could become a problem.
We want to assume that the regulatory authorities, especially the European Central Bank, the other banks that issue the European space and the US Federal Reserve, will be vigilant of the behavior of this Google Bank as well as other Internet operators that can follow this path to regulate and control this type of competition and use of data.