Banking with Wearables: Should the finance industry start using smart devices more?

Latest guest post from Misys.com (see also ‘HOW AUGMENTED REALITY IS MAKING ITS PRESENCE FELT IN MODERN BANKING‘). MisysFS, aiming to to transform the global financial services industry, through making financial institutions more resilient, efficient and competitive.

Having spent the better part of the past decade or so playing catch up with ever-evolving consumer technology, financial institutions must surely be giving themselves a pat on the back as of late. After something of a rocky mobile banking has now taken over not only in-branch, but desktop Internet banking as the primary way that customers choose to manage their finances.

According to the BBA, mobile banking software had been downloaded no less than 22.9 million times by March 2015, with apps responsible for moving £2.9 billion each week.

So far, so good perhaps, but the challenge of using modern technology to meet customer demand is far from over for the finance industry, Just when they thought they had all the answers, tech manufacturers changed the questions with their latest high-tech consumer gadgets; wearable technology.

What is wearable tech?

Wearables (as they’re often commonly known) are essentially smart devices which take many of the features and functionality of your typical smartphone out of your pocket and put them onto a user’s person, typically in the form of a watch or, in Google’s case, a pair of futuristic-looking glasses.

Though perhaps not the first to introduce wearable technology, the Google Glass project was certainly one of the most talked about when it was first released -albeit in prototype form- back in 2013. Unfortunately, not all of the hype was positive for Google. Since the company’s augmented-reality headsets also included a feature which allowed visitors to record video, serious privacy and safety concerns were levied at the company, who pulled the product out of production less than a year after it went on general sale.

Early success

Yet whilst Google were forced to take their big new release back to the lab, they did have better success with their Android Wear smartwatches. Avoiding many of the privacy concerns that made Glass practically a no-go for banking institutions, Android Wear did fair better than the ill-fated headset, and provided the finance industry with one of its first examples of how mobile banking software could be adapted for wearables.

That example came courtesy of Nationwide, who in November 2014 became the first UK bank to modify their current smartphone app for Android Smartwatch. The innovative product -which allows the company’s existing mobile banking customers to check real-time balances by scrolling or speaking into their watch- proved enough for the industry as a whole to take note.

Making an impact

A recent report by fintech company Misys revealed the 96% of banking professional’s surveyed expected wearable tech to have a significant impact on their industry, with some service providers already making a head start by following in Nationwide’s footsteps.

Following the much anticipated release of Apple’s own smartwatch in 2015, the likes of ScotiaBank in Canada and the Australian St. George’s Bank joined Nationwide in releasing their own apps for the device, most of which focussed on simple, real-time balance checking.

A good start for the industry, certainly, but shouldn’t more institutions be looking to capitalize on the latest evolution in consumer technology?

Disappointing sales

On the one hand, there’s certainly an argument against rushing into doing anything solely for the wearable market. After all, both Apple Watch and Android Wear reported initial sales figures that fell well below expectations, meaning there isn’t quite the same demand to cater for this market as there is for mobile banking.

At least, there isn’t just yet. Over the next couple of years, that’s all likely to change. Despite disappointing sales, both companies are pushing ahead with their plans for wearable technology, with a number of their competitors having either released rival versions already, or gearing up to do so over the coming months.

It’s perhaps fair to say then that wearable tech is here to stay, and though it may not have been widely adopted just yet, it’s only a matter of time before it will be. What this means for the finance sector then, is that there’s perhaps never been a better time than now to start developing prototypes and engaging users as early as possible.

Preparing for mass adoption

By embracing a technology whilst it’s still in its infancy, institutions have the perfect opportunity to grow and develop new banking software solutions at the same rate as the devices which will carry them, ironing out usability issues as they go along and ensuring they’re ready for the day when Android Wear, Apple Watch, and their competitors grow out of the early adoption phase and into the mass market.

It’s also an opportunity for banks to learn from the mistakes they made with mobile banking and ultimately spending the next several years playing catch up as the technology industry inevitably speeds on ahead. Do that, and those in the finance sector will no doubt be able to give themselves the pat on the back they deserve.

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