The Challenges of Wearing a Bank on Your Wrist

Mike Davies, Regional VP Sales EMEA North at GMC

Mike Davies

Developments around smart devices and mobile payments in general have revolutionised the way in which we conduct our everyday personal banking. Purchasing items has never been easier, with a simple tap of a smartphone or contactless card, your item has been paid for. Now with the rise in wearable technology such as the Apple watch (which is bound to be even higher after this Christmas), we should see customers purchasing and receiving updates through a variety of devices – from watches, stickers and pieces of jewellery, as often as they did with their smartphones. With such vast changes being made to our devices and the growth in smart devices’ capabilities growing exponentially, banks must revolutionise and update their processes in order to stay relevant to their customers. This is crucial now more than ever as with each year that passes, the spending power of millennials grows, which as a demographic favour digitisation over traditional methods.

Changes to smartphones and smart devices as a whole has meant that customers are constantly seeking new ways to engage with their banks efficiently and conveniently. Smartphones now allow us to make reservations at restaurants, search for jobs, order a taxi and control the heating all from a simple tap of a screen. It stands to reason that wearables will begin to creep into these areas too. If customers expect updates and activities to be done through their phone for other services, banks should assume they will be expected to offer similar capabilities on these new devices too.

Banks shouldn’t be watching the wearables revolution take place from the sidelines. They have an opportunity here to take an active role and begin to define what banking on your wrist can do.

Digitisation also offers the opportunity for banks to use wearable compatibility as a key differentiator amongst competitors. This is particularly true for high street banks who are now competing  against disruptive forces like Metro and Atom Bank. Recently, banks have almost always competed on price, mainly driven by the rise of aggregator websites such as comparethemarket.com, which have reduced the act of selecting a current or savings account down to a simple comparison list. However, having the cheapest service or the biggest signing bonus is no longer the most attractive asset to flaunt. Customer satisfaction is proving, time and time again, a crucial factor in retaining and attracting customers.

Whilst banks continue to digitise, and enable their customers to manage their finances through more up-to-date means, they can expect to see customers become more engaged and in the long-term attract new customers. However, banks must ensure that all communications channels are consistent. Customers rarely ever see channels separately, so if one route is challenging or disappointing, the whole brand is at fault which can in turn have a negative impact on customer satisfaction levels. It’s important to have a strong message through all channels, as customers connect with brands in different ways, in their preferred manner. Wearables will prove an especially difficult challenge in this regard – their small (or nonexistent) screens but high connectivity options present an interesting puzzle for banks. Those that figure out where they can add value-adding services or uses for data gathered from these devices first will be at a considerable advantage.

It is clear that over 2016, banks will continue to focus on digital service development. It’s inarguable that they were slow off the mark in this respect, but have done a good job catching up. Wearables present an opportunity to be on the front foot and innovate how a bank communicates to its customers. Fundamental to the success of any bank that goes down this path is the ability to deliver a useful and relevant service, regardless of channel, to ensure a consistent customer experience at every point in the journey.