Wearable technology is one of the 2014 buzz phrases. As wearable devices begin to pique consumers’ interests, more and more businesses are wondering where they fit in to this emerging trend. Financial institutions are no exception. While some banks have already started working on apps for devices not yet available to the public, other financial institutions are left wondering when they should enter the wearable technology arena. Is banking really something consumers want to conduct using a fashion accessory?
As the name implies, wearable technology is a device, fashion accessory or piece of clothing which incorporates some type of technology. The two most popular forms of wearable technology current are the smart watch, which looks like a wrist watch but functions more like a phone or tablet, and Google Glass, a pair of glasses that also functions like a smart phone or tablet. The size of the devices (smaller than a phone or tablet) makes voice recognition a key feature. Most wearables today are designed for the health and fitness industry, but the race to develop wearables into a technology that replaces smart phones and tablets has other industries – like banking – wondering if or when they should get on board.
Some large banks, like Banco Sabadell, have already taken the plunge into developing apps for wearables. One of app’s functions is a GPS linked to Google Maps which tells the user where the nearest branch or ATM is located and how to get there. If the customer gets to an ATM that is not working, he or she can connect to a banking representative who can see what the customer sees through the device. The bank also is working on the ability for customers to deposit checks by taking photos of them with Google Glass.
A study conducted by Javelin Strategy and Research says large banks like Barclays, U.S. Wells Fargo, Fiserve and Paypal are trying to take Banco Sabadell’s lead by demonstrating that wearable can deliver financial alerts, pay for good and services and more.
The real question is, do consumers really want this? A study conducted by GlobalWebIndex indicates they may not. The study asked consumers in various age and income categories about their interest in wearable technology. Consumers between the ages of 16 and 24 had the highest interest at 71%. The next age bracket – ages 25 to 34 – came in at a close second with 70% interest. Consumer interest decreased significantly as respondent ages rose, with only 50 percent or less interest in consumers age 45 and older.
Where does banking fit in to this? Read the most recent issue of my monthly newsletter for opinions from real consumers, as well are more details on all of the studies mentioned above and advice from thought leaders on how financial institutions should proceed in the wearable technology trend.