Last week we discussed ways banks are adopting new technology to promote greater customer satisfaction and loyalty. The problem with using technology to deliver banking services is that technology changes rapidly and there is always something new on the horizon. In fact, banks are starting to become the largest employers of software developers as they work to keep up with the latest consumer technology. The latest technology hurdle banks and credit unions face is porting their mobile banking apps to work on wearable devices.
More than 17 million wearable tech devices shipped in 2014. Apple has reportedly sold 2.8 million iWatches to date, including 1 million on the first day of pre-orders, and there are already 3.500 apps available for the iWatch. Barclays has already released an iWatch application in the United Kingdom. And one third of smartphone users are expected to buy a wearable device within the next year. Clearly, forward-thinking banks and credit unions are already introducing banking apps for the iWatch and other wearable platforms. The challenge is trying bundle the features and functions consumers want in such a small package. Clearly, services like remote deposit will be impractical, but banks and credit unions can harness wearables in other ways to improve customer service and the customer experience.
The biggest drivers for buying wearables according to users surveyed by PowerReviews is improving the in-store experience (82 percent) and touchless, one-click payments (22 percent). E*Trade Financial also says that one third online investors want to check their investments using wearables.
American Banker reports that Citi, Tangerine Bank, and USAA are among the first banks to develop iWatch apps. Citi's Mobile Lite app, for example, lets users check account balances, see their last few transactions, and monitor credit card spending including a graphic view of spending against their credit card limit. The Citi iWatch app is also set up to work with Apple Pay.
Of course, with a new technology platform come new design concerns. For wearables like the iWatch, banking app developers have to deal with new issues:
First there is the smaller form factor, which makes display size limited.That means executives have to decide what information is most important to customers since there is no display real estate to waste.
Then there is authentication and security. The wearable interface is limited in terms of input capability, so new strategies need to be developed to verify users. There is no way to do two-way authentication so other devices and strategies need to be adopted for security.
Some banks are looking at wearables as a novelty item that they have to embrace to stay relevant for younger customers. Most banks are still relying on smartphones and handhelds with larger screens and more interactive capability for complex mobile transactions. Still, porting banking apps to run on wearables is a concern for many financial institutions. Is it really essential to have an iWatch app to be competitive, or are those software developer resources better utilized elsewhere?
New technology platforms are like buses – there’s always another one coming along. However, technology moves so quickly it’s hard to know which platforms are worthy of attention before they become passé. With 2.8 million units sold the iWatch is probably here to stay for a while, but banks and credit unions have to start developing for these emerging platforms long before the hardware hits the market. That means making educated guesses about which emerging platforms to support.
The best strategy, of course, is stay close to your customers. Understand how they bank and what platforms they use today and are most likely to use tomorrow to meet their banking needs. Customers may not consider lack of an iWatch app a deal-breaker today, but support for specific banking technologies may be an important consideration in the future. The only way you will know is to keep talking to your customers.
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