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Banking on Wearables – Looking Beyond the Obvious

June 23, 2017 - Shweta Shivaraja Product Manager, Infosys Finacle


Wearable technology has been evolving and gaining ground since 2014 – taking various shapes and forms. We have witnessed smart glasses, clothes, shoes, wrist bands, even going as far as smart cuff links. While most of these can be written off as hypes, smart watches and bands have gained a sizable number of enthusiasts1.
Banking industry has sought to ride this wave of popularity of wearables and in their pursuit to reaching customers in new, innovative ways. So far, banks have mostly experimented with providing an easy payment option or basic account information on wearables. But, banks have had a checkered past with wearable technology with few success stories – wearable banking has not been able to scale to the success of a mobile or a tablet2. Does the lack of success mean the end of the road for wearables in banking? We believe that this does hold potential which banking industry can exploit to provide a better customer experience – by looking beyond the obvious use cases.
Look beyond the Obvious
Several banks have jumped into the wearable bandwagon already3. Most have treated it as yet another channel, focusing on providing similar channel functionality/features on the wearables as on the other existing channels. This perhaps has been the fundamental reason for the lack of success in this space.
The popularity of wearables necessitates banks to explore the right use cases. We have listed the key principles to identify use cases for maximum impact and adoption:

    • Ride on Wearable Features – Wearables technology is increasingly getting fine-tuned, providing more and more opportunities to banks to utilize these technologies. Increasing use of AI, virtual private assistants, increasing security and accurate sensors make these devices stand apart from mobiles4. Hence, banks would need to ride on these capabilities, not look at using wearables just as an extension of the mobile banking experience. As an example, a bank can use a combination of AI and virtual private assistant mode to interact with its customers and provide services. A customer who has set a budget and a health goal is at the checkout a pastry, a chat can be initiated with her providing her a view of her expenses as well as reminding her of the implication on her health goal. The goal here is to utilize the unique features of wearables and not have generic interfaces, user experience.
    • Hyper-Personalized Experience: Wearables are a rich source of data on many aspects including person’s attributes, his/her health indicators, habits, routines to name just a few. This information can help a bank to completely personalize its reach to its customers. “Segment of one” can be achieved by gathering, aggregating and analyzing the data gathered from such devices. For example, for a customer that recently has started running, a bank could send out offers on running shoes, clothes.
    • Easy Security – Security and ease of use seem to be at loggerheads with each other, with banks struggling to provide both for its customers. Wearables provide an easy, unique option to provide an additional layer of security for bank customers. A customer’s individual biometric information can be used to authenticate him/her, via the wearable device, reducing friction in authentication. With increasing accuracy in sensors within wearables and embedded security features for information on wearables, banks can provide seamless authentication and security for its customers. For example, using a heartbeat monitor to authenticate a payment by a customer would be a frictionless way to achieve security.

A comprehensive digital and customer experience strategy would be lacking without a strategy around wearables. A clear understanding of where the wearable technology is moving and combining the same with clear strategy to engage customers will help banks in formulating their offerings to provide real value to their customers.

  • Allied Market Research expects the smart watch market to potentially reach USD 32.9 bn by 2020, growing at a whopping 67% CAGR from 2014 to 2020
  • According to a Gartner survey, 71% of consumers in mature markets had not used wearable for banking. The same was at 38% for developing markets.
  • Some examples of banks launching wearable include – CIBC, CitiBank, USAA, ICICI, HDFC.
  • 10 Wearable Technologies and Capabilities That Should Not Be Ignored – Gartner (http://www.gartner.com/smarterwithgartner/10-wearable-technologies-and-capabilities-that-should-not-be-ignored/)

Shweta Shivaraja

Product Manager, Infosys Finacle

Shweta has over 12 years of experience in information technology and banking. She currently works with the Finacle Product Strategy Team. She is passionate about studying the key trends shaping the banking sector, and helps define the roadmap and product strategy for products in the Finacle suite.

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