Banking is warming to wearables, but they may not be warming fast enough.
Over the next five years, wearables are expected to be integrated into channel strategy, with the digital-only channel seen as viable over bank branches, based on a new study.
Almost three quarters (73%) of banking executives expect to integrate wearables into their channel strategy within five years and six out of 10 believe a digital-only channel model is viable, according to the study.
The study on the future of retail financial services comprised a global survey of 500 senior banking and insurance executives by Cognizant, Marketforce and Pegasystems.
And it’s not only wearable devices from which financial transactions will be coming.
By 2020, most (87%) expect it to be common for consumers to make financial transactions using smart TVs and 68% via home appliances.
Most (79%) execs said their organization has to significantly change its operations over the next five years to keep pace with millennials.
On the downside, older systems already in place remain a roadblock, with 85% of banking executives saying a lack of single customer view prevented a high level of personalization and more than 80% are struggling with analytics and access to rich customer data.
Many see payment-enabled wearables on the horizon. Here’s the timeframe in which bankers expect wearable payments to be common for financial transactions:
But other stats in the study point to a long road ahead. For example, only 4% say they have achieved full omni-channel integration, never mind adding wearables.
And only 9% of financial service organizations currently offer wearable devices as a channel and only 7% have pilots underway, according to the study. But a quarter (26%) of banks are either using or piloting wearables as a customer communication or service channel.
Payments from wearables goes well beyond the Apple Watch, with the Jawbone Up4 fitness tracker already linked into American Express and Disney’s MagicBand being used for park payments, among other things.
Just as most banks finished dealing with mobile banking, along comes The Internet of Things, sending many back to the drawing board.