Busy Few Weeks in the Payments World

Oct 16th, 2014

It has been busy few weeks in the payments world. Not surprisingly, reaction to Apple Pay’s announcement is the hottest topic in payments. It even manages to dominate European conferences with no specific agenda items dedicated to Apple. We at Celent added our own voice to the debate by publishing a new report on Apple’s entry into payments, in which we describe Apple Pay and assess its prospects. Celent clients can download the report here, and all are welcome to join me at the webinar next Monday, October 20th. By then, Apple Pay should be up and running – the iOS upgrade which would launch Apple Pay is expected over the weekend.

In the meantime, PayPal announced that it would separate from eBay and its core auction business, and would get a new CEO, Dan Schulman, a seasoned payments executive from American Express. Arguably, both companies will be able to better focus and compete as stand-alone businesses. However, it’s difficult not to think that the separation also makes them both more “in play” in the industry consolidation. Immediately, rumours started swirling around who might buy/ merge with PayPal; some of the loudest noises concentrate around Square, although so far those rumours have been denied by Jack Dorsey via Twitter.

Autumn is traditionally a conference season, and this year again, many of us are attending the leading events from Sibos and EFMA to Money2020, AFP, and BAI. My colleague Stephen and I were last week at Mobey Day in Barcelona, as usual an excellent event; many thanks to Mobey Forum for their cordial invitations! As a sign of its growing presence and influence, Mobey Day became two days this year. It focused on two major themes – Host Card Emulation (HCE) and biometrics. While the latter was brought to the forefront by Apple Pay, the former can certainly be an alternative strategy for banks looking to deploy NFC solutions for Android devices.

Dan Latimore and I will soon be attending Money 2020, and are very much looking forward to spend a few days immersed in payments innovation and meeting our clients. Our diaries are filling up fast, but if you are going to be there and would like to meet, let us know or reach out to your Celent account manager.

However, as much as we all get excited about innovation in payments, we can’t afford to forget what makes it all work in the back office. We have been conducting extensive research this year into card management and transaction processing (CMTP) market and the vendors that serve that market. Our report offering “a dozen observations” on the market trends has been out for a couple of weeks now and I will be hosting a webinar on this topic next week on October 22nd – join us if you can.

Is Your Financial Institution Data Driven? Survey says, ‘Probably Not’

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Oct 15th, 2014

Data analytics is not a new pursuit. SAS, for example, has been offering solutions since its inception in 1976. But owing to the inherent complexity of advanced data analytics platforms, experience with data analytics has been the domain of only the largest organizations. However, the last several years have witnessed an explosion in applications for data analytics, especially in the area of customer analytics. With the growth in applications came conveniently pre-configured software solutions that were fine-tuned for a bevy of specific applications. The combination of product evolution, specialized analytics-savvy consultants, professional services firms, and cloud computing, has brought advanced analytics swiftly down market. Now, even small banks and credit unions can foray into customer analytics with a comparatively small investment and without a legion of data scientists on staff. But are they?

Well, that depends on what you mean by data analytics. Celent recently surveyed about 100 North American banks and credit unions to understand the state of analytics adoption and the drivers behind its growth. In our resulting report, “Customer Analytics Adoption in Banking: When Management Doesn’t Lead” (September 2014), we noted that about half of the financial institutions in the sample had some experience with data analytics. However most of these efforts might be considered rudimentary, such as customer profitability or web analytics applications. A third of the respondents to the survey had experience with social media sentiment monitoring, an example of advanced analytics, but inexpensively available in the cloud and easily used by non-data scientists. In contrast, usage of predictive analytics applications is far less common. Just one in five financial institutions demonstrated experience with next-best-action analytics, and one in ten showed an understanding of customer lifetime value.

What gives? If customer analytics holds such great promise, why aren’t more banks and credit unions deriving value from its use? I think there are at least two reasons. First, we are seeing an immature state of data analytics at most financial institutions. Second, and perhaps more important, there appears to be a lack of interest by leadership at the top of these financial institutions in driving data-driven strategies.

Is Your Organization Data-Driven?
Using data to make decisions is not the same as being data-driven. An organization doesn’t become “data-driven” simply by installing an advanced data analytics application. So, what does it really mean to be a data-driven organization? Celent asserts that data-driven organizations use analytics extensively and systematically to influence and execute strategy. Practically, this takes many forms, but it begins with attitude. Organizations start by deciding to value data, develop confidence in its validity, and make decisions based upon data even when doing so is uncomfortable. In other words, being data-driven amounts to having faith in the efficacy of data and acting accordingly. It means walking the walk, not just talking the talk.

How many banks are true data-driven organizations? Not many, we find. It’s probably fair to say that the concept of an organization being data-driven isn’t a binary thing. Instead of a “yes” or “no” answer, perhaps the question is best posed, “How data-driven is your institution?” and additionally; “How data-driven would your organization be if it were up to you?” The survey found that just 29% of responding financial institutions thought their organizations were highly data-driven. Nearly 90% of that same sample said their organizations would be highly data-driven if it were up to them. In other words, they wished for it. Clearly, we think that the industry wants to be data-driven, but doesn’t think it’s there yet.

analytics self assessment
Source: Celent survey of North American financial institutions, July 2014, n=78

Lack of Leadership
Intuitively, this suggests a leadership problem, but does the data support this conclusion? It does. We cross-tabbed the survey results by respondent roles and found significant differences in attitudes surrounding data analytics. Specifically, responses to the question “How data-driven would your organization be if it were up to you?” varied dramatically by role. It turns out that all respondents in IT/IS roles wished their organizations were highly data-driven – or would be if it were up to them. In contrast, respondents in strategy or innovation roles as well as those in marketing, showed somewhat less passion for being a data-driven organization. Perhaps a surprise, coming in last in support of data driven strategies were those in executive management; compared to those they lead, this group was the least desiring for their organizations to be data-driven.

data drivenness
Source: Celent survey of North American financial institutions, July 2014, n=78

Although surveys aren’t the final word on any topic, the results do suggest a leadership problem, which if addressed, would go a long way towards better serving customers through skilful use of data analytics. As banks better understand the merits of being data-driven, we think that financial institution leadership will ultimately lead the march to supporting data-driven business strategies, particularly those focused on customer analytics.

I will be addressing this topic in more depth in a session at American Bankers Banking Analytics Symposium in New Orleans on Thursday, October 16th.

Should your bank acquire a UX design firm?

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Oct 15th, 2014

I was very intrigued and excited when I heard about Capital One’s acquisition of Adaptive Path. When was the last time you heard of a bank acquiring a design firm? This fresh thinking is exactly what is needed in the banking space. I’d also like to see some of the major software vendors acquire firms like this (cc:@dmgerbino). I think it’s a great idea for several reasons:

  • Design and user experience (UX) are critical to digital AND brick and mortar banking. From a cultural perspective, it makes a huge difference to have designers and UX specialists “on the team” as opposed to engaging external contractors. UX becomes embedded in projects and in thinking.
  • Design / UX should be a horizontal function at financial institutions. Creating a horizontal function can be beneficial to all parts of the bank. There are parts of the bank that require even more help than retail banking (corporate digital banking is a great example) . It can really help to be able to tap into an internal department and have this approach permeate through various parts of the enterprise.
  • Labs and UX go hand in hand. If your bank has a lab or is thinking about a lab, you are likely going to have a bunch of new projects. Development and design belong together.
  • It makes for an awesome PR buzz : )

Banking UX isn’t just about the business case, it’s about an approach. This is the quote I gave to American Banker:

“When the paint starts to peel on the walls of the branch and the carpet starts to fray and the glass is scratched, what happens? It gets renovated,” said Jacob Jegher, a research director at Celent. “Same can be said for digital banking.”

Or so I would like to think… like it or not, banking projects have to be justified, compete for scarce IT dollars, and can be very hard to pull off if they don’t have a direct link to revenue. Banks often come to us for advice on how to tweak their business case to show increasing revenues, # of customers, etc. if they move forward with a new UX and design. Many banks resort to creative accounting in order to get their business cases approved. We often point them in the direction of customer retention metrics since it’s about delighting your customer. Happy customers are loyal customers. I’m looking forward to the day when UX becomes part of banking culture and isn’t just another metric in a business case. Sounds like Capital One is on the right track.

 

Oracle’s three modes of Progressive Transformation

Dan Latimore

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Oct 9th, 2014

I was able to attend Oracle’s Open World at the end of September, and although it conflicted with Sibos, it was an extravaganza. While there I sat down with some of the folks involved with core systems; they outlined the interesting way they’re thinking about progressive transformation (briefly, how to migrate core systems gradually; the opposite of a “big bang” approach). Oracle agrees with the consensus that a big bang for any sizable bank is going to be problematic. What interested me was that they outlined three different approaches for progressive transformation:

  1. Replace a vertical slice
  2. Replace a horizontal slice
  3. Create a new target state architecture off to the side

Without going into great detail, I’ll describe how Oracle has at least started the journey in three different banks around the world.

  1. Vertical Slice. Suncorp in Australia has started the process of moving off its Hogan core by focusing on unsecured lending; its next stop will be secured lending.
  2. Horizontal slice. KeyBank, based in Cleveland, announced at Open World that it intends to use non-core systems components of Oracle Banking Platform (“OBP”) to enhance and modernize its mobile and online channels. To be clear, KeyBank has not committed to a core transformation. The project is in its very early stages; it’s one we’ll watch with interest
  3. Target architecture. National Australia Bank’s new entity, UBank, is a digital-only bank that NAB created as part of its bank transformation using OBP. Its goal is to change the customer experience, and uptake has surpassed initial expectations.

Celent’s perspective is that progressive transformation (or whatever various name different vendors use for the same basic concept) is a way to purchase a real option as banks think about how to modernize their systems and accommodate the increased demands that digital access place on their technology. It lets banks begin a journey without committing them to course of action that might not be appropriate down the road as the world changes.

Time will, of course, tell how successful each of these projects will be, but thinking about the different ways to approach a phased core transformation is useful for any bank with core on its strategic agenda (which should be…almost any bank).

When $250 Million Can’t Buy Cyber-Peace

Oct 8th, 2014

Last week’s newspapers brought the unsettling news that JP MorganChase’s internal CRM systems were penetrated by unknown attackers, compromising the personal information of 76 million households and 7 million small businesses. The Bank had released a statement to its clients on Thursday noting that “there is no evidence” that account numbers, ATM PINs, or social security numbers were accessed during the cyber attack.

Today, news reports indicate that four other large financial services companies including Citibank and E*Trade were targeted by the same group, thought to be based in Eastern Europe or the Middle East.  In the case of JP Morgan Chase, the investigation has been focused on the personal computer of a single employee whose system may have been compromised by malware.

The incident continues to be investigated by the FBI, Secret Service, and JP Morgan’s own private vendors, so there’s no need to speculate on who is responsible or what other information may have been compromised in the attack.  Still I hesitate to note that the Bank’s soft “no evidence” qualifier gives it plenty of wiggle room should the investigation uncover additional data leakages.

The point here is that like the two other large data breaches of 2014 — Target and Home Depot — the JP Morgan Chase breach occurred in its private data center, the kind that is built at significant cost to resist these sorts of attacks – or at least detect and repel them when they do.

JP Morgan’s annual report shares that the bank spends more than $250 million annually on cybersecurity, and will have 1,000 employees focused on the task by the end of this year.  Most banks do not have the size or management scale to match JP Morgan Chase’s annual investment, but if even $250 million can’t buy cyber-peace, what chance do average sized banks have of protecting themselves from the next malware du Jour?

I contrast this situation with the growing use of cloud services in the financial services industry.  While other industries have been quick to embrace the cost, capability, and flexibility of cloud services, the banking industry lags behind — largely based on valid concerns about information security and control.

JP Morgan Chase’s announcement serves as a wake-up call to banks of every size, informing them that when sensitive client data is concerned, private data centers and public cloud providers are partners in the ongoing fight for data security.  The next bubble to burst will be the long-held presumption that maintaining customer data in a private data center is inherently safer than storing it in a public cloud.

To a cyber-attacker, an IP address is an IP address.  Whether sensitive customer data is located on a physical server on the bank’s premises or a virtual server located on a public cloud is mostly irrelevant.  What really matters is how well a bank (or its service provider) monitors network traffic, detects unusual or malicious activity, and shuts down suspect traffic.  The other lesson here is that as always, a little encryption can go a long way in ensuring that customer data is safe from the prying eyes of clever and determined hackers.

 

Spending a day with IBM’s Watson

Dan Latimore

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Oct 8th, 2014

As an IBM alumnus (but no longer a stockholder) I’ve gotten pretty used to seeing the company do things a certain way. And then I attended a day-long “Watson at Scale (aka Ecosystem 2.0)” event on October 7 and had a lot of my old notions upended. Watson, of course, came to prominence when it won Jeopardy in 2011. Immediately after that IBM began experimenting with a select number of industries (Healthcare, Travel and Retail) to demonstrate proofs of concept and learn what works and what doesn’t. Beginning in January of 2014, Watson expanded dramatically and is now covering 26 industries. IBM proclaims that Watson is the harbinger of a new era of computing, what they call “Cognitive Computing.” There’s just too much information being created today for any single person to digest; Watson aims to “amplify” experts’ capabilities. Doctors, salespeople, and wealth managers are but a few examples.

IBM says there are four key attributes to understand:

  • Watson understands natural language (computational linguistics).
  • Watson is a voracious reader
  • Watson provides recommendations with confidence levels
  • You don’t program Watson, you teach it

Mike Rhodin, the IBM SVP who leads Watson (under an unusual board-governed structure), described the key insight about Watson: it’s not that Watson gives answers, but rather that it generates hypotheses, gives confidence intervals around those hypotheses, and provides evidence trails. It does this by ingesting enormous amounts of data, being taught by humans with a series of questions and answers, and then learning on its own as it proceeds. The more data it has, the better it performs. Watson does a better job providing recommendations for people when it knows something about them. A salesperson will sell differently to an introvert than an extrovert, as a simplified example. Watson can generate a personality profile on the basis of a person’s twitter feed or blog posts – I’m not sure how accurate it is, but the concept alone is pretty startling.

Terry Jones, an entrepreneur previously associated with Travelocity and Kayak, introduced a new company called WayBlazer that uses Watson’s technology. It aims to be able to answer queries like, “I want to go on a golf trip with my buddies in October,” or, “Give me an itinerary for Costa Rica in May with my two kids.” Watson might ask clarifying questions, and then would come back with recommendations. The prototype is currently in place for Austin, but a service like this highlighted clearly what Watson has the potential to do, if implemented successfully. Another lightbulb for me was Terry’s description of Watson as a liberal arts major, not a math geek. It could do airline pricing optimization, but that’s not what you’d buy it for.

WayBlazer is but one example of the ecosystem that Watson is building. Realizing there’s a shortage of skills in Cognitive Computing, IBM has teamed with ten universities to offer courses on the subject; this fall all of the classes were oversubscribed. From a standing start in January, IBM has about 100 partners and expects that to continue to grow. Watson had 1 API in January; it now has 8, with more than a dozen in development. IBM may have finally figured out how to execute at startup speed under the umbrella of Big Blue.

Watson’s interest in financial services is currently very focused. Insurance is one key space, particularly around underwriting. Wealth Management is the other key area, with risk and compliance being a third. You may disagree with Watson’s prioritization, but their intentional focus is spot-on – they’ve got to demonstrate some tangible successes before they begin to branch out.

Based on different discussions, Watson’s revenue will come from four sources:

  1. Consulting to investigate and establish what Watson will do for the firm
  2. Priced products (e.g., oncology)
  3. SAAS revenues from running Watson for individual projects
  4. A cut of the revenue that partners earn from Watson projects

What’s ultimately different this time? In this new IBM (a place the company has been forced to by intense competition), Watson:

  • Is playing the role of an ecosystem platform
  • Is using partners to reach consumers, realizing that IBM’s strength is as a B2B company
  • Has built a new physical space, reversing a trend of selling real estate and having employees work remotely
  • Is not trying to do this on the cheap
  • Is focused on just a few areas

What does this mean for banks and financial services firms? The IBM take is, of course, that you’ve got to be exploring Watson or you’ll be hopelessly behind. That’s overly broad, but I recommend that firms at least get up to speed on the potential of the technology and see whether it can apply to them.

We’ll have to watch to see if Watson carries through on its promise, but efforts like this are a necessary (if not sufficient) first step in the right direction for IBM.

 

Zapp makes progress

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Oct 8th, 2014

Clients following our payments research will know of our interest in Zapp. Zapp is a new UK payment method that utilises the Faster Payments scheme. Zapp is a way for the merchant to create a Faster Payment in the consumers device (mobile/tablet/laptop) using a wide variety of methods (bar code, SMS, QR code, etc). This provides all the relevant data – value, account details, etc. The consumer then just authorises the payment.

We’re interested for a number of reasons.

Firstly, as mentioned in my first real-time payments research report, there seems to be a myth that real-time payments are P2P payments primarily. Zapp is very much a way for consumers to buy things both online and offline.

Secondly, there has been a move to thinking about real-time payments enabling other products, rather than just being a standalone payment method. These are known as overlay services, and a number of initiatives (Australia, Finland) have explicitly stated their desire for overlay services to be created. A few overlay services have been created for Faster Payments – PingIt and PayM for example – Zapp is by far the biggest, most ambitious, and potentially, disruptive.

Thirdly, Zapp state that is cheaper than the alternatives. Implicit in this, is cheaper than cards. Zapp are very careful to ensure the language they use doesn’t imply its card like (and therefore potentially subject any regulation around fees that could be considered interchange). Yet the route to market includes using large merchant acquirers.

With any new payment method, adoption is slow. Payments are a 2-sided market. You need sufficient numbers of consumers to have adopted to interest merchants – yet consumers won’t adopt something that they can’t use. Zapp has potentially half the equation solved, with large banks signed up and Faster Payments reaching 100% of UK current accounts. It was interesting to see then the announcement this week that Zapp have signed some major retailers to take part. Furthermore, these are big, household names – Sainsburys and Asda are two of the largest supermarkets in the UK.

With official launch in 2015, there is still a long way to go, but the chances of success seem to improve daily.

Creating an ecosystem to drive disruption

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Oct 6th, 2014

We usually talk about how hard it is for the financial industry to innovate at the right pace, and doing the right bets. In my opinion Latin America lags a little bit behind, in part for not having anything similar to the US’ Silicon Valley. We see though, increasing efforts to generate the environment and providing places for the ecosystem to mingle.

Adding to Dan’s post about Celent attending the several industry conferences around the world as part of our job, and keeping our finger on the pulse of the industry, I wanted to share a relatively new conference that is gaining a lot of traction in Latin America as a result of its effort to bring together traditional players with fintech start-ups: Next Bank.

I will be moderating a panel on Digital transformation in financial services next October 16th, 2014 at Next Bank Americas. The idea is to create an environment where innovators from within and outside financial services institutions come together to explore the digital transformation of the industry.

It is a collaborative conference that covers innovation, transformation and startup-driven disruption in financial services in Latin America. The theme is re-think and connect – addressing the reality that the industry is undergoing momentous change and it’s time for a new collaborative approach.

You will more likely encounter traditional players like banks, consultancies and technology vendors sharing the stage with alternative players like startups, digital ecosystems and players from other industries. All of these players, the old and the new, coming together to create a new community of innovators in financial services exploring the real future of the financial services industry and the big ideas that will forever change the industry in the region

As part of the conference, it will host the final of BBVA Open Talent for the US, Mexico and Canada, a startup competition in search of today’s most disruptive tech startups in these countries in two categories, New Banking and Digital Life. Celent will be writing a report of those more promising start-ups, so expect it coming soon after the conference.

Celent is also a conference partner, so feel free to use our discount code (C3L3NTNB4M3) to get a deal on tickets.

More information @ www.nextbankamericas.com/en

Hope to see you there!

Gearing up for Money 2020

Dan Latimore

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Sep 29th, 2014

One key element of Celent’s value proposition is our attendance at conferences. To be a little flip, we attend so you don’t have to! More accurately, we attend because you have neither the monetary nor the time budget to jet all over the world to industry events. For us, it’s part of the job, and we get to keep our finger on the pulse of the industry at gatherings hosted by individual firms and neutral third parties. In September alone, for instance, I’ve been in Panama, Barcelona and San Francisco. A more comprehensive (although not necessarily complete) list of our attendance is below (and that’s just the third-party events!).

Money 2020 image

One event that’s come incredibly strong out of the gate is Money2020. Its first incarnation was two years ago and garnered more than 2000 people; last year it had over 4000, and this year is shooting for over 6000. Celent (Zil Bareisis and I) will be attending (and in full disclosure, we are a media partner of the event). We view this as a “must;” the breadth of the ecosystem attendees is immense, the diversity of topics fascinating. In the last two weeks I’ve mentioned Money2020 to two clients and both have replied that they’d have to look into attending, particularly based on my positive feedback from last year’s event.

If you’d like to register, please go to http://money2020.com/register.

Look for us to tweet, blog and otherwise have a host of insights after this and other fall conferences. What events do you consider crucial?

Why I’m not Buying an Apple Watch

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Sep 17th, 2014

AplWatch42_34R_HomeScreen_HERO

First reason –I’m an Android user and enthusiast : )

Like it or not, Android and iOS don’t play nicely with each other, and the Apple Watch is a companion device for the iPhone. It’s definitely an intriguing device though, and I enjoyed learning more about how Apple plans to tackle the wearables space. The Apple Pay announcement was also extremely fascinating – my colleague Zil has prepared an excellent and informative review of Apple Pay.

Back to the topic at hand. Why would I stay away from this device? A few reasons come to mind, some are banking related, and others are not:

  • The battery life is expected to be pitiful. The rumour is that this device will POSSIBLY last through the day and will need to be charged every night. I have to regularly remember to charge my laptop, mobile phone, Fitbit, tablet, Kindle, kid’s iPad, and a bunch of rechargeable batteries that are used in various toys and gadgets around our household. I don’t want anything else that I need to charge regularly, and I certainly don’t want to travel with another charging cable or dock. My goal is to downsize our chargers and we need better battery life and a set of charging standards to be able to do this. Note that this comment isn’t specific to the Apple Watch – it’s an issue for the Android Wear watches as well, and the primary reason I’m hesitant to dive in. I’m also a believer that the success of mobile payments will be contingent upon battery life (among other things). Who wants to end up at the POS with a dead device or worry that this could happen?
  • It only comes out in early 2015.  The slew of Android smartwatches has clearly put pressure on Apple to ANNOUNCE a device but they obviously aren’t ready to release it. Otherwise, it would have ended up on the shelves as rapidly as the new iPhone 6 and 6+.
  • It’s a first generation offering. This builds on the previous point regarding battery life and release date. Like most new products, this first gen device will require some improvements. It will certainly be fun to tinker with, but will be frustrating at the same time. If you are an iPhone user and you want a smartwatch you are limited to this first generation offering. Note that competing Android offerings from Samsung have already gone through multiple product iterations and will be even further along by the time the Apple Watch is released. Motorola and LG also have first generation products out there that will be rapidly refreshed.
  • I don’t think it’s very fashionable. I like watches and there is much to appreciate about a beautiful timepiece. A watch is my primary if not only “accessory.” To me this watch looks a bit childish and cheap. Not to mention that if you want a nicer band or colour it will cost more money. My wife disagrees with me, she thinks it’s awesome and she is an iPhone user. Most of the Android watches aren’t that fashionable either, with the exception of the Moto 360 (save for the black bar at the bottom of the screen) and the LG G Watch R. The watches will get nicer over time and it will take a generation or two for these to become more elegant timepieces. Note that not everyone shares my opinion about the Apple watch as a fashionable timepiece – Hodinkee, a watch review site (not a tech site), finds the watch to be well made and fashionable. Hat tip to Jimmy Dinh for pointing me to this particularly informative review.
  • Health reasons. Radios communicating everywhere – in my pocket, my house, at the office, etc. Do I need another, particularly one that is stuck to my body? I have no scientific data to back this up at this point, but I do think about harmful exposure.

Now that I’ve vented, here are a few reasons why I would consider the watch. I’m not sure they are enough though to justify the price tag:

  • I’m a gadget enthusiast. I’d buy a smartwatch for pure tinkering purposes. You’ve probably gathered by now that I like this stuff. Even if it’s not practical, I enjoy a hands on approach to understanding how these devices work and what they can be used for.
  • As a fitness device and companion. I currently wear a Fitbit, and while I really like it, I’d like to get rid of it. It’s just something extra to remember, carry and charge. This class of devices will likely disappear as heart monitors, step counters, etc. get built into smartwatches and mobile phones. The Apple Watch, or any other smartwatch could make a great bike computer or running computer.
  • To experiment with Apple Pay (in the morning of course, when the battery still works!).
  • As a conversation starter with bankers. I enjoy demoing cool technology to our banking clients that unfortunately don’t have the time to think about new technology or devices. Their day jobs are demanding and they turn to us for opinions on how emerging technology with impact the banking landscape.

Enough about me. More importantly, what does all of this mean for financial institutions? I recently blogged on wearables for banking and you can read more about that here. Even if the masses aren’t flocking to smartwatch banking, I believe that every bank should buy this watch and a couple of Android watches. It’s critical for banks to understand the impact of new technology and the best way to learn about it is hands on experimentation and experience. Buy a couple, give them to your senior digital banking product folks and tech staff so that they can form educated opinions. This will require some budget of course – a budget that every bank should have for research and development and the creation of new products. What I’m suggesting certainly isn’t typical or commonplace, but well needed if banks want to be the digital powerhouses that they are aspiring to.

Will you buy the Apple Watch? Why or why not? How does Apple Pay factor into your purchasing decision? Please weigh in with your thoughts or comments.