Gartner predicts Facebook and Google to shape the future of financial services industry

Digital firms like Apple, Facebook, and Google are likely to play a considerable role in shaping the future of the financial services industry, says a report by Gartner. Though these new firms may not be the banks of the future but the traditional banks will have the edge over their internet-oriented rivals.

"The evolution of the internet continues to raise questions about the continued viability of brick and mortar establishments in retailing and financial services," says David Furlonger, vice president and Gartner fellow. These internet-oriented mega-firms are seen as the commercial enterprises of the future. But in case of retail banking it would be like trying to hammer a square peg into a round hole, this just does not fit.

Hr further adds that the digital mega-firms have many things in their favor. They are not only the masters of data management and analytics but also define agility, both from a technology and a business model point of view. Moreover, they can extend their value chain analysis beyond the core offerings and identify new opportunities for business and specific customer needs. They also have the ability to define and then redefine the business models that they deploy while their focus on what partners can bring to their propositions stands as an equally strong differentiator.

Analysts observe that these digital mega-firms will alter and shape the market by helping it develop, feeding the fires of change by making customers better informed, and occasionally making catalytic forays into the market with niche financial services offerings. Gartner analysts examined the future of banks during Gartner Symposium/ITxpo.