In 2049, will the Gafa people break the bank?



“With our background in hardware, software, and services, we believe Apple is in a unique position to change the whole credit card experience fifty years from now. “ Tim Cook, the boss of the firm which is worth more than $ 2 trillion on the stock market, displays a voracious smile when he unveils his first bank card at the end of March 2019. Recognizable by its titanium design, this “Apple Card” has so far only been launched in the United States, in partnership with the Goldman Sachs bank, already attracting 3.1 million Americans. But it should soon be available everywhere, even in France, where Apple’s CEO says he is looking to partner with “A particularly agile retail bank”.

For its part, Google has just teamed up with Citigroup bank to offer bank accounts, while Facebook is unifying its system for transferring money between Messenger and Instagram users and Amazon is working on a technology that will allow to pay with the palm of his hand in his supermarkets.

So many innovations that are added to all the payment services – often referred to by the word “Pay” – already launched by Gafa (the acronym for the aforementioned companies) as well as by the Chinese giants Baidu, Alibaba and Tencent ( WeChat). So many initiatives that have the same objective: to gain a foothold in banking services, identified both as a link in the value chain that must be seized and as a lever to interfere even more deeply in life. users.

“Fragmentation of the financial ecosystem”

And the banks in all this? The tech titans swear they don’t want to replace them, and that they will always remain partners. It remains to be seen whether it will not be a simple role of a subcontractor having lost control of its customers. Rafi Haladjian, “serial entrepreneur”, today at the head of Deepscore, a financial start-up (we speak of “fintech”), decided:

“It’s only a matter of time before these giants eat the banks. When we see the number of fintechs launching every day and how profitable the business of banks can be, it is inevitable that Gafa will replace banks. “

More measured analysis on the side of Oliwia Berdak, director of financial services research at Forrester:

“By 2049, we should witness a fragmentation of the financial ecosystem, where we are no longer just a customer of a bank but of a multitude of banking offers. We will have our account in one place, our savings in another, our loan with a third actor, etc. The payment card will then become a service offered in the titans’ global offerings, as Amazon offers TV series with its Prime deliveries. But, behind, there will always be banks to take care of financial transactions, loans, etc., sometimes in white label. “

Except that if this scenario occurs, “This will only be the beginning, afterwards they will go up by grabbing as much income as possible to finally get their hands on the entire value chain, predicts economist Joëlle Toledano, author of “Gafa: let’s take back power!” (ed. Odile Jacob). Just look at what Amazon is doing in product distribution, or what Apple has done in music versus Spotify. They are champions of progressive vertical integration. “

Greater confidence of young people

Until then, the challenge of the Gafa will be above all to convince users to entrust them with their salary or their savings. And for now, only 37% of French people say they are ready to use the current or future banking services of the digital giants, according to a study by the consulting firm CGI. “But this proportion flirts with 50% for those under 25”, points out Stéphane Houin, director of digital offers for financial services at CGI. The youngest in fact display a greater ” trust “ in banking services offered by Gafa, Amazon in the lead with 36% favorable opinions among 18-34 year olds, ahead of Google (23%), Apple (22%) and Facebook (11%), according to a study Forrester. An appetite already noted with the Apple Card, of which 70% of owners are under 30 years old.

But “The road is long from the project to the thing”, in the words of Molière. The Gafa do not have a Philosopher’s Stone, and can obviously fail. It wouldn’t be the first time. For example, Google launched its first payment system in 2006 under the name “Checkout”, before re-founding it as a “Wallet” in 2011, to finally build its “Pay” since 2015. In fact, the firm is still very dependent on our traditional bank card and plays a simple role of facilitator of payment, in particular with the mobile. However, if the contactless transaction by card has become essential since the Covid-19 crisis (+ 60% according to the Banque de France), purchases made with a smartphone still remain marginal (0.38%).

An omnipotence that worries

Another observation: for ten years, all alternatives to traditional banks have experienced moderate success (only 3.5 million French people have taken the leap of neobanks, two-thirds for secondary use, according to the KPMG firm). Beyond that, the role of old financial organizations could be amply supported by central banks, which are keen to preserve the framework of a highly regulated and absolutely essential system.

“If the banks disappeared, we would risk a collapse of the economy, alert Stéphane Houin from CGI. It is unthinkable, the regulator will not let this happen. “ For Joëlle Toledano, “We will see how far central banks will protect historic banks, with the risk, on the one hand, of not allowing innovation to break through and, on the other, of opening the door to new digital empires” .

In Europe as in the United States, the omnipotence of Gafa worries, and the legislators promise more restrictive regulations in the future, with in particular the idea of ​​calming their financial ardor. Thus, the US Congress is very cautious about “made in Google” bank accounts. And everything is being done, both American and European side, to hamper the development of Facebook’s virtual currency project, Libra.

François Villeroy de Galhau: “Facebook’s libra must respect the rules of central banks”

One of the big questions will be the protection of privacy, as these titans have amply demonstrated their gargantuan appetite for “data”. Bank data appears to be a miraculous manna for improving advertising targeting systems, which today are based on a presumption of purchase deduced from users’ internet browsing. Knowing precisely what customers are acquiring thus appears to be a major opportunity to refine profiling. But, not sure that we, citizens, will accept to invite the Gafa in our wallet so easily.

What finance and what currency in thirty years? “L’Obs” invites you on October 29 from 5 pm at the Cité de l’Economie (1, place du Général Catroux 75017 Paris) to understand how we will pay in 2049.



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