Thankfully for would-be customers, it looks like Google is approaching this the same way that Apple and Samsung does, which is by storing the fingerprints locally and securely, and that they will not be sent to the cloud. This is according to an answer provided by the Nexus team during a recent Reddit AMA.
According to the response, “Fingerprint features are securely encrypted on the device, and processed in the secure Trustzone protected area of memory.” Google also goes on to add, “Fingerprint features never leave the device and are not shared with Google (so for example if you setup a new phone, you need to re-enroll your fingers).”
Like we said this is similar to how Apple and Samsung have set up their system as well. Google notes that in the event your device is stolen, you can also go ahead and find it via Android Device Manager. Or if you think chances of you recovering it are slim, you can also lock it and erase it via the software as well.