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Smart Watch for Retail Banking, Is it time?

Wearable technology has been the talk, as the “next big thing”, since Google released the prototype of Google Glass. It has been hailed by the tech fanboy club but also been criticized on questions relating to privacy. However, even to a common observer, wearable is indeed the future.

In contrast, the smart watch as a wearable has seen a quieter release, with models from Samsung and Sony, Pebble and most promising preview of Moto 360, with Android Wear. With these developments, the smart watch, seems to be on the way for mass adoption. Infact the Smartwatch group reports that 3 million smartwatches sold in 2013 compared to 0.3 million in 2012, the global smartwatch industry has multiplied tenfold in the last year. The ten leading smartwatch companies reached a market share of 82%. An exploding number of hardware vendors and the definition of app standards will result in a continued high growth in 2014 and exploding growth beyond. Software will outpace hardware as the key value driver.

How then do retail banks look at this new form factor and lead the space on wearable tech. I do foresee the smart watch being a hybrid or, at least, a sub-channel in Retail Banking, as it is less immersive and could be more contextual to current lifestyles. So let’s look at the emerging possibilities

Smart Watch Apps will work well for personal financial management (PFM). We don’t expect Gen Ys to be immersed in banking apps on their phone, they would rather whatsapp. But, we can see a future for personal financial management using the smart watch, with its more “information push” approaches. Gen Ys would love apps which can tell the balance in their accounts at the flick of their wrist or, for that matter, help them track their success with self-defined or bank-assisted savings goals. This can be made even more engaging with gamification. I reckon this could be made very appealing to Gen Y audiences as well as those outside this segment. 

With smart watches, banks can serve small data more effectively to individual customers. An average customer is not often financially prudent. Wearable apps can focus on building up a person’s financial health, based on their data and tracking of their spending.  There is also good case for mass affluent banking with real time data and advice on investments.

Smart watches, will bring a more contextual need to access information. Location-specific offers, such as discount offers, tracked by the wearable are distinctly possible in the near term.

Leading through with smartwatches, wearables can enhance the branch experience.  Google Glass is an example in point, and technologies such as this could be central to enhancing the next generation banking experience. By guiding customers to the appropriate service, wearable technology can minimize the time customers spend at a branch while improving services levels dramatically. 

A few firsts have already started happening in this domain. Spanish banks Caxia and Banco Sabadell have announced smart watch and Google glass applications. As with other channels, such as the mobile, it’s common for a majority of banks to adopt a wait and watch approach. However, this often leads to a protracted and expensive catch-up game with customer expectations. Wearable technology is a fast developing area, and given how much technology is influencing the way we interact with a bank, it is time for retail banks to capitalize on this wave early on.

Catch more thoughts and trends on this subject at this upcoming webcast by Finextra and Oracle - Banking beyond the smartphone - How mobile will banking be in the future? Click Link



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