The Infosys Labs research blog tracks trends in technology with a focus on applied research in Information and Communication Technology (ICT)

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Wearables in Banking

Wearables are electronic devices incorporated into items that can be comfortably worn on a body or embedded into accessories. According to IDC, the wearable tech market will see shipments almost double to 240.1 million by 2021. Wearable adoption has been driven by higher acceptance and adoption by newer generation due to its positioning as a standalone device and the evolution of operating systems which are more user friendly.

Wearables enable bankers to develop customer centric solutions and offer hyper-personalized offerings to clients. The technology enables organizations to collect real-time behavioral data which can be leveraged to provide personalized and real time offers similar to google and amazon. To Illustrate, consider wearable fitness devices which monitor the wearers movements, location and activity level to advise users. Similarly, banks can leverage the technology to become their 24/7 personal banker.

Another advantage that the technology provides is the autonomous verification of customer identity. Wearables enable users to authenticate transactions without having to remember password by using biometric technology. The feature would enable banks to streamline services and customers to initiate payments or withdraw money from ATM with the wave of a hand. For instance, The Australian and New Zealand Banking Group (ANZ) is now accepting cash withdrawals via smartwatches at 2,400 ATMs across Australia. Similarly, Gemalto's MiniTags and MicroTags have already been certified by Visa, MasterCard and Amex. And can be used at all locations where these companies accept contactless payments.

Advancements in biometric technology have helped financial institutions combat rising concerns of fraud and identity theft. An example is the Apple Watch which utilizes plethysmography to identify if a body part (in this case, the wrist veins) has increased or decreased in size to identify the user. Banks will also need to leverage architectural design and prevention analytics to protect customers against threats such as Bluetooth theft, signal interceptor issues, and virus attacks.

Multiple financial organizations have already taken the lead in the adoption of wearables. Barclays has partnered with brands like Topshop, Garmin and Mondaine to design devices compatible with its bPay chip in order to enable customers to make payments with a range of wearable devices. Similarly, ABN AMRO bank is testing smart rings, watches, and bracelets as a new NFC payment method. Companies like US Bank, Wells Fargo and Citibank have also embraced wearables by provide balance tracking and notification to customers through smartwatches.

In conclusion, wearables are going to revolutionize the way organizations interact with their customers and prospective clients. Organizations can only meet rising consumer expectations by using the technology to interact with their customers outside the branch. Wearables are poised to become an integral part of our everyday life and provide a doorway for companies to provide cater to our needs.

References:

https://www.happiestminds.com/Insights/wearable-technology/

https://www.i-scoop.eu/wearables-market-outlook-2020-drivers-new-markets/

https://www.iotforall.com/future-wearable-technology/

https://www.bankingtech.com/2018/01/how-wearables-will-change-everything/

https://www.bankingtech.com/2018/01/how-wearables-will-change-everything/

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-cons-wearables-in-banking.pdf

https://www.ngdata.com/what-is-personalized-marketing/

https://www.nfcworld.com/2018/09/25/358126/anz-lets-customers-use-smartphones-and-smartwatches-to-withdraw-cash-from-atms-across-australia/

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-cons-wearables-in-banking.pdf

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