Banks may have just got to grips with online and mobile banking, but advances in wearable technology provide a glimpse of customer interaction in future.
As high street lenders increase their reliance on digital services, a range of devices - from smartwatches to wristbands and even Google Glass-style eyewear - could offer quicker and easier ways to check account balances or provide alerts and loyalty rewards. Most significantly perhaps, the ability to make payments via wearable devices using mobile wallets such as Apple Pay - and, potentially, Samsung's own offering announced this week at Mobile World Congress - means banks can play a greater role in financial management and purchasing decisions.
"Wearables are going to be part of the future of banking, and not too long from now," says Clayton Locke, chief technology officer of Intelligent Environments, a British firm which built one of the first banking apps for the popular Pebble smartwatch.
"It is about making banking and payments more convenient for the user. It won't be for everyone, but there will be enough people out there who will be wearing an Apple Watch that will want to have their financial information on their wrist."
The hype around the technology may not have translated into sales so far - just 720,000 Android Wear watches were shipped during 2014. However, industry watchers predict the imminent launch of Apple’s Watch device will spur wider adoption, with some estimates that more than 40 million smart devices will ship in total during 2015.
Daryl Wilkinson, group head of digital development at the UK’s largest building society, Nationwide, believes that developing apps for wearables can help banks meet customers' fast-evolving demand for digital interactions.
“There is a small but growing expectation that companies can offer these wearable devices and value added services on top of them,” he says.
“Not everyone wants to go to the branch, and not everyone wants to log on to internet banking. Some people will want to get a quick statement or balance on their smartwatch, and many people want to pay for things on their watch or a band as well.
“If we didn’t respond to this, we would probably be lacking in that modernity area that some new or existing customers might demand from us.”
Early trials - Google Glass, Oculus Rift and smartwatches
Despite the technology being in its infancy, a diverse range of applications and services are already being created by banks across the world. However, most of the wearables development coming out of banks’ innovation labs have been experimental, as much a marketing tool as a viable customer proposition.
A number of lenders, such as Spain’s La Caixa and Banco Sabadell, have trialled apps for Google's on-hold Glass project - providing augmented reality branch location, for instance. At the more future-gazing end of the spectrum, Wells Fargo has toyed with more exotic virtual reality proof-of-concepts using Oculus Rift.
Other innovations have included the use of wearables for authentication purposes with the Royal Bank of Canada’s partnership with startup Nymi, trialling its heartbeat monitoring wristband to authenticate contactless payments. The new Apple Watch is also expected to have similar biometric authentication, which should allay some customer fears around security.
Early incarnations of smartwatch banking apps that have been launched to customers - such as those from Nationwide, Australia’s St George’s Bank and Canada’s ScotiaBank - have tended to be aimed at more simple actions such as checking account balances.
Most of these wearable apps build on the existing functionality of mobile banking apps, aimed at creating a more efficient method of interaction and authentication.
“It is really about thinking about quick glance-able moments and what it is that customers might be looking for at that particular moment,” says Oliwia Berdak, Forrester Research analyst for European consumer financial services sector.
“On a mobile you can easily sit down and review your account or spending on the bus – with a smartwatch it is really on the go, something that is instantaneous.”
Nationwide’s Android Wear app, for instance, is essentially an extension to its mobile app, allowing users to access the building society’s Quick Balance feature from their wrist, either by scrolling through to the app or speaking into the device, as well as the ability to move small amounts of money between a user’s accounts.