Is it Google Glass or smart watches that hold the key to the future?
A new report says wearables present an immediate opportunity for financial institutions (FIs) that can embrace inevitable experimental setbacks and capitalize on breakthroughs. San Francisco-based Javelin Strategy & Research says Barclays, U.S. Bank, Wells Fargo, Fiserv, and PayPal are experimenting to demonstrate that wearables such as Google Glass and smartwatches can deliver financial alerts, pay for goods and services, and give consumers greater digital control over their finances.
Javelin views smartwatches as the first wave of financial wearables that can leverage existing adoption. But the bigger, longer-term payoff will come when wearables incorporate advances in speech recognition and augmented reality. For example, 53% of consumers indicate a willingness to use voice banking, a key technology that can be incorporated in wearables that have yet to emerge.
“Platforms succeed when they entice developers to create apps that keep consumers coming back for more. Some developers and financial institutions initially will be satisfied with the softer ROI that can come with being the first to market and establishing a foothold with targeted products and services,” said Mark Schwanhausser, Director, Omnichannel Financial Services at Javelin Strategy & Research. “For FIs, justifying investments for wearables is likely to start with bolstering a tech-savvy brand image that can attract customers. But larger, sustained investments will require evidence that wearables are pervasive enough to result in cost savings and revenue.”
The Javelin report examines current wearables experiments such as Google Glass, smartwatches, and fitness bands; how wearable technology is likely to evolve and why; and five conditions that must be true for wearables to become pervasive. In addition, the report outlines the short- and long-term return on investment (ROI) for wearable investments, and prescribes ways financial services innovators can invest now to lead the way.
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