Wearable Tech World Feature Article
November 24, 2015

Millennials Set to Spur Smartwatch Banking

It would be easy to say that the smartwatch has only really changed the fitness industry, but a new report from Juniper Research suggests that, just by 2017, smartwatches will be a major part of the banking industry thanks to changes in millennial banking habits.

The Juniper Research report details that the number of banking apps accessed worldwide is expected to hit 10 million in 2017. By 2020, this number will clear 100 million. Over the last 12 months, Juniper notes, smartwatches have been part of a “push” to banking information services, and the arrival of the Apple Watch back in April served as the necessary catalyst for many other banks to jump in.

Juniper notes that this runs somewhat counter to expectations, as most wearable devices aren't really suited for carrying out financial functions. However, one big use of wearables in banking could be as part of a multi-factor authentication system, which would provide a crucial extra layer of security to banking processes. Juniper's Nitin Bhas noted that technology evolution would be present in this sector, and will thereby give wearable devices in banking a little extra push.

There are other future developments slated for the field, Juniper notes, including a set of new tools like augmented reality banking and cashless money boxes. These are commonly regarded as gimmicks and tend to have a short shelf life with customers. Push banking services using short messaging service (SMS) systems are on the decline, for instance, with banks seeing overall drops in total messages sent.

Further targeted services are on the way, driven by banks turning increasingly to customer analytics tools in a bid to find out just what the customer wants. With the global mobile banking user base set to reach two billion by 2020 — accounting for just over a third of the global adult population at 37 percent — there's plenty of room for expansion on the table.

It's good to see that banking is adapting. It's easy sometimes to think of banking as stodgy, not particularly caring what its users think or need, but that’s fundamentally untrue. Changes in tech and the institution of banking drive business to care. With customers — particularly millennials — changing attitudes not only toward technology but also toward banks, those changes help keep banks relevant and operational.

Physical bank branches are still top of the heap for most bank customers, but the millennial embrace of technology is changing things in a lot of ways. Smartwatches are one of the big changes, and it's encouraging to see banks make the move toward embracing that technology.

Edited by Kyle Piscioniere

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