Secure Marketspace with Mike D'Agostino

How Google Will Save the Banking Industry (and the U.S. Economy)

And while I've been patiently waiting for any sort of paramount press release from the FDIC (I'm sure you've seen this by now), a major event took place that will have a profound effect on the banking industry and the economy in general. And it has nothing to do with bailout plans or regulatory compliance.

But before I get to that, I'd like anyone reading this to think back to 1998 for a moment. Think about what you were doing on a day-to-day basis and what life was like during a normal routine day. The Internet and websites were still relatively new, and I bet many people would say they were just starting to use the Internet more and more. At some point you could find movie times, search for definitions and how-to, perhaps even auction some garage-sale type items. Most of you were probably still going to the bank and depositing your checks into different accounts every other week, in person, at your branch.

The point at which people started to rely on Internet access as a means to manage their finances is the moment "online" became accepted and part of our culture. 

When Internet banking applications were developed, though, all of a sudden the Internet in general became a vital tool. By the early 2000's, many banks and credit unions took the initiative and made Internet banking available to their customers. People could now transfer funds, pay bills, etc. without stepping foot in a branch. In addition, investors could use the Internet to day-trade, and now it is a given that online banking is part of any serious financial institution offering. The point at which people started to rely on Internet access as a means to manage their finances is the moment "online" became accepted and part of our culture. All those cranky people that said, "Oh what do I need the Internet for?!" could finally create their first email address.

The embracement of being "online" has created quite a rush of technologies, services and products over the past 10 or so years. Banking applications do play a significant role in our dependency on the Internet and thus have helped keep the economy going by pushing new technology and development.

Now back to the major announcement, which is that the first major "Google phone" is now available. The G1 mobile phone runs on the Google Android operating system. Not Windows Mobile, not on Apple software, but an open platform designed by Google. And they are helping to push the state of mobile technology to a new era.

And Google is not alone. Everyone has spent at least a few minutes with an iPhone by now, and all you CEO-types can take a deep breath now that Blackberry has made available their next-generation mobile phone as well. You can be sure that all the other major mobile phone manufacturers are readying their new phones, too. The point is that we are witnessing a huge convergence between traditional desktop/laptop computers and cell phones which will, once again, create a new technology marketplace for consumers to spend their money and move the economy forward.

Apple got everything in motion with the iPhone, and Google basically let the rest of the world know that we wouldn't have to wait for Microsoft when it comes to mobile computing. It's up to financial institutions now to embrace this technology and legitimize the platform.

The economy has taken a bit of a hit lately, however computers and mobile phones have already become a standard within our culture. Obviously, so has banking. Neither is going away. Apple, Google, and others have set the stage for acceptance of a very new technology, and banking must legitimize this technology as a standard by embracing it. If financial institutions start focusing on this technology - now -- it will drive the creation of countless new products and technologies. Think of "desktop computers" and the number of products that exist that interface with them. Then recognize that the new wave of mobile phones, as a kind of evolution of the desktop computer, would warrant just as many new products and technologies.

This will happen; the question is how fast? My argument is that the new wave of mobile phones/computers we're seeing will only be seen as "entertainment devices" (outside of being a standard phone) until banking applications become ubiquitous. I cannot think of a better time than now, it's as if the stage is set. The economy has taken a downturn, credit is difficult to obtain, however people still have money. Computers are not new, laptops are not new, we've seen iPods and a huge array of portable devices - now it is finally time for the ultimate convergence to happen when mobile phones bridge the gap among all these new devices. Banking applications will help drive acceptance.

In a few years, remember back to 2008/2009 and ask yourself again what you were doing on a day-to-day basis at work, and on the Internet. Eight or 10 years from now we'll laugh that we used to have to sit at a desk or use a laptop to access the Internet. Google has helped move us closer to that day, and mobile banking applications will be the cornerstone of a new era of technology and computing that will contribute to a more stable economy.



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