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What’s in a wristband?

What’s in a wristband – will wearables prevent heart attacks and help manage money better?

If we thought smartphones allowed for constant access to information, wearables allow for instantaneous access to constant information.  With little more than a glance at the wrist, wearers can read an email, check their vital signs or make a payment.

With the much anticipated launch of the Apple iWatch, it’s predicted that wearable sales will total more than 75 million units in 2015 – that’s an increase of 163% from 2014.  And by 2018, it’s estimated that there will be more than 340 million wearable devices in use.*

So with the continued focus on the digital journey for banks, where do wearables fit in?

Balances and alerts

Probably the most obvious use is allowing for direct access to account balances and to alerts straight onto the wearable devices like a smartwatch.  Taking it a step further, banks can use the vast amount of data they hold on customers to engage in predictive analysis resulting in proactive money management messaging.  Just imagine – a customer makes an unplanned stop in their favourite clothing store, geo-tracking picks this up, the banks knows this is a favourite for that customer with the average purchase totalling £100+.  The bank sends an alert to the customer to say they only have a balance of £30, this is read immediately on the customer’s smartwatch, they decide against any purchases knowing their balance is low.


This isn’t a revolutionary use, it’s already being done by payment providers, retailers and social networking sites.  Joining the payments game with wearables isn’t about crossing the finish line first; it’s about crossing the finish line with the biggest bang.  Wearables serve not only a function, but make a fashion statement.  Just imagine -  a customer is getting ready for a night out, short on space and trying to minimise what they take, they decide on a fashion accessory embedded with an NEC chip already registered to their bank card thus leaving their debit card at home.


One of the biggest challenges wearables can bring to a bank is risk.  However, one of the greatest assets can be improved security.  With lots of wearables now including a heart rate monitor, banks can look to leverage the use of biometrics to verify identification.  Just imagine – a customer goes out to make a planned, but large, purchase.  This purchase sets off fraud alerts at the bank and requires customer verification to approve the purchase.  The bank can send an alert to a smartwatch app, the customer approves a biometrics test, their identity is verified and the purchase is approved. 

Ok, this may be further down the line for wearables but think of the great experience a customer would have if it was this easy and secure.

The likelihood of up and coming challenger banks incorporating wearables into their digital strategy from the start is high, it makes it even more critical for established banks to start considering how they will incorporate this into their digital journey now.  The process won’t be too dissimilar to the process they went through when looking to incorporate mobile apps into their digital strategy – and look how far they’ve come and the importance they hold now.


* Market Forecast: Wearables, July 2014



Comments: (1)

A Finextra member
A Finextra member 30 June, 2015, 14:12Be the first to give this comment the thumbs up 0 likes

Very interesting thanks Paul. Apparently only 6% iPhone owners in the US own a wearable so clear opportunity for Apple Watch (Kantar March 2015). As smartphone sales start to slow world-wide, providers are likely to keenly pursue this market. However regarding UK, 85% of consumers interviewed felt their phone did all they need and they'd not busy a smartwatch. So we may see campaigne to win hearts and minds shortly ..