In 2015, Juniper Research predicted the number of banking apps that people would access through their smartwatches would surpass 100 million by 2020. Image Credit: Supplied

Dubai: Growth in wearable devices like smartwatches is giving an opportunity for financial service firms to expand mobile payments and account management capabilities.

Despite the fact that wearable technology is still in its earliest stages, the financial industry has been eager to embrace it as part of its digital strategy.

According to research firm International Data Corporation, worldwide shipments of wearable devices are expected to reach 213.6 million units in 2020 from 101.9 million units by the end of 2016.

In 2015, Juniper Research predicted the number of banking apps that people would access through their smartwatches would surpass 100 million by 2020.

Payments technology firm NCR, which makes hardware and software for self-service kiosks, point-of-sale terminals and automated teller machines, is serious about wearable banking.

George Flouros, vice-president for financial services at NCR India, Middle East and Africa region, told Gulf News that users want to interact with financial institutions through many different devices and as quickly and intuitively as possible.

“We expect wearables to be a part of the future of banking as it will fuse with mobile banking and increase user interactivity. It will allow customers to get a quick glance on the go and get the information they need instantaneously,” he said.

Already payment solutions are being offered by Apple Pay and Samsung Pay in many parts of the world.

However, he said that wearable banking will not be for everyone but there will be enough people out there who will be using it.

“Mobile banking is widely adopted globally. We have invested heavily in an ecosystem of solutions in the past few years. We have made a number of acquisitions in the past two years in over $2 billion to have the technology and the platform to enable us to assist financial institutions to integrate solutions around these devices as they evolve,” Flouros said.

Digital Insight, an NCR acquired company and one of the pioneers in the mobile internet, has launched apps for wearable devices in the US.

“We see a big opportunity, not only for us and financial institutions but also for other industries. We believe that wearables will capture a bigger market share,” he said.

NCR has already implemented wearable banking in 80 institutions in the US and the results [utilisation] are encouraging.

“We see more demand from consumers to use more electronic channels as opposed to going to the branch. The consumer is dictating new business models to financial institutions,” he said.

However, he said that financial intuitions have to be careful in what information they send to a wearable device as it has a small screen and not like a smartphone. The information should be more relevant to a consumer.

He said that most of the consumers are using it to view account balances at a glance and locate nearby branches and ATMs right from their wrist, but there are no limits to how you can use it in the future.

Banks will also look to market selective information on wearable devices.

“More the solutions used, higher is the engagement. According to our study, PC and mobile constitutes only 24 engagements per month while PC, mobile and tablet constitutes 33 engagements per month and 80 engagements per month on PC, mobile and smartwatch,” he said.

“Early adopters of the smartwatch are leading the way and will help us develop what those future banking experiences should be. Banking will continue to evolve and customer centricity will be at the core. Wearables have the potential to drive incremental usage of mobile payments.”

He said the technology is there and the market will dictate when and what types of services are needed. “We have a close eye on market adoption and are strategically making decisions based on users’ behaviours. We are already in discussions with number of financial institutions in the region for wearable banking,” he said.

Banks here are extremely competitive and plan to offer more services to cut costs and boost revenue. They are looking quite extensively in lowering their branches by utilising technology as a way to move transactions from a branch to these devices, he added.

“Any new technology can create opportunities and dictate new business models for many industries. The challenges we see are security, regulatory framework and the availability of data. Problems will always happen but how we address them is the most important question,” Flouros said.