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Pundits have spent years assessing whether big tech – the so-called GAFA quartet of Google, Apple, Facebook and Amazon – will move further into financial services.

I’ve been examining the evidence for this expansion by combing through press releases, web content, hiring records on LinkedIn and financial industry conference presence. My conclusion is that while it’s unlikely we will see a wholesale move by big tech into all aspects of banking and financial services, they will cherry pick services where they can be an effective partner, enhance existing services, and deepen their data/lifestyle dominance.

The evidence

My investigation started by walking the halls of some of the financial industry’s largest tradeshows.

Microsoft’s CEO spoke at Sibos last year, but no other GAFA firms had a big presence at the conference, nor at Money 20/20. Google Cloud turned up at the equity trading show TradeTech in Paris in 2018, but most institutional financial conferences, specialist media and trade bodies do not see much GAFA activity.

There is also relatively little thought leadership on finance coming from big tech. GAFA firms are consumer focused and feel that their disruptive strength and clout, whether in data and customer relationships or cloud, makes it unnecessary for them to show specific industry expertise. Their marketing tends to be product-led not insight-led.

When it comes to hiring trends, the GAFA firms have taken many more people from big advertising groups than from financial services, especially on the institutional side.

Two headwinds discourage GAFA from a full-scale assault on financial services.

Finance comes with a challenging set of reputational and regulatory issues. This is not the time to open a full Second Front with financial regulators, especially in Europe. Financial regulation is much more complex and fragmented than tech regulation, and also increasingly about individual executive accountability, as in the UK’s Senior Manager Regime. A Senate Committee hearing is simple compared with the grind of backroom meetings with financial supervisors for a bank licence.

Secondly, technology and banks operate globally, but in fundamentally different ways. Bank and insurers have to operate in deeper national silos, however large their international networks, and indeed these silos are getting deeper in this era of Brexit and Trump.

GAFA operates across Europe with a much thinner skin, even as they beef up on public policy, communications and marketing people to deal with the public backlash against big tech.

What’s ahead

All of the above means that GAFA need different communications and positioning if they are to move into financial services. Traditionally they take a rather hard-nosed approach to media relations, seeking total control of the story. That will fail in financial services. Variated spokespeople, more thought leadership, more humility and a less product-driven approach are required.

The GAFA firms undoubtedly have the firepower to move quickly, but banks can set worries of a wholesale takeover aside. We will see innovation in payments, especially small size payments, maybe linked to chat services. We’ll see further partnerships and maybe some fintech acquisitions. GAFA are concerned above all about data and traffic, which might auger a push for full service data from financial lifestyles.

Watch for GAFA hiring trends, both in senior bankers and public affairs and communications professionals with financial services backgrounds. Look out for a deeper Brussels financial services presence. It’s quite likely that the GAFA firms will deliberately keep a low profile as they develop strategies, as there’s no need to frighten regulators or existing bank partners.

Ultimately if consumers see Facebook, Google or Amazon as more trustworthy brands for complex financial services products than banks and insurers – and politicians and regulators are comfortable – big change is going to happen. But the road ahead is complex, as Facebook’s delightfully revised mantra “move fast with stable infrastructure” concedes.

Andrew Marshall is Cognito’s Deputy CEO.