Wearable devices have long been regarded as the next frontier in e-commerce.
Problem is, the financial services industry has yet to fully commercialize the previous frontier: mobile technology.
One could even argue that the smartphone has become a wearable device given the separation anxiety many consumers confess to feeling without their mobile phone at their side.
Nonetheless, there are meaningful developments in wearable technology that warrant credit unions’ attention before they find themselves behind the curve.
Let’s start with the first wave standard bearers.
The Apple Watch is an interesting case, although to most casual observers its launch has been a ho-hum. Apple is quick to point out, however, that it sold more watches than iPhones in the first year of each product’s release.
While Apple undoubtedly suffers from unrealistic launch expectations, it’s also clear that the rear guard of apps bringing the “sizzle” to the Apple Watch’s capabilities has yet to materialize.
Still, it’s become common enough to see folks glancing at their smart watches for quick updates to envision a slow ramp to ubiquity. Whether financial apps are a fit for this level of real-time response remains to be seen, but fraud alerts and purchase authorizations seem like natural uses.
Tackling the problem from the other end of the spectrum is Fitbit. The company’s wristbands have already achieved ubiquity and have proven mass market interest in the collection and transfer of personal data.
The firm is now pedaling furiously to avoid becoming the next Garmin—a one-trick pony whose groundbreaking idea winds up getting subsumed into competitors’ full-suite solutions.
Think of the Fitbit as the killer app that the Apple Watch is missing. Will it prove easier for Fitbit to round out its offerings—with fraud alerts, for instance—or for Apple to incorporate reasonably similar fitness functionality, as Microsoft’s product suite did to “cut off the air supply” of point solution competitors in the early 2000s?
Another aspect of the promise of wearables lies in beacon technology, which retailers can use to push promotional offers or to simplify the checkout experience.
By positioning beacons in and around their stores, merchants can customize an offer based on the aisle a shopper is browsing, or make a compelling offer to a prospect about to walk past the store entrance.
And once enrolled, the potential exists for shoppers to bypass the checkout line and proceed straight to the exit, being charged electronically—an equivalent of the Uber experience.
For these purposes, a smartphone is as effective as a watch or other device. But the idea of a quick glance at one’s wrist has appeal.
There remain details to be sorted out—most notably a tangle of proprietary systems—but the potential here is quite real.
Some argue that the automobile is evolving into the largest consumer “wearable.” A quick scan of ad campaigns touting “connected cars” even at mid-price levels makes it clear this technology has gone mainstream.
To date the focus has been on music, in-cabin wi-fi, navigation, and audio messages.
It’s not immediately apparent how much incremental improvement a connected car can offer for financial transactions (a card-free ATM cash withdrawal would be nice). But as consumer expectations evolve an application is sure to follow.
For a glimpse a little further into the future check out Cicret (pronounced “secret”).
This bracelet has been in the concept/prototype stage for a few years now and is still courting crowdfunding. But it promises to go the digital watch one better and project messages directly on the user’s forearm, capitalizing on its larger available “screen size.”
The jury’s out on whether this group can bring it to market, but it’s an interesting idea.
Meanwhile, if the ridicule showered on Google Glass wasn’t enough to shame the category out of existence, Microsoft is waiting in the wings with its HoloLens—another example of a cool idea in search of a practical real-world use.
None of these technologies are likely to upend credit unions’ service models in the near term. Like most FinTech innovations, however, they warrant monitoring and being prepared with a plan ready to execute upon signs of meaningful traction.
For instance, watch for signs of increased smartwatch adoption among your member base, or the rollout of beacons at local merchants.