Wednesday, September 10, 2014

How Apple Watch Will Change the Face of Banking

Credit unions and bankers, I have good and bad news for you with the introduction of
Apple Watch. The good news, your members/customers will have another way to interact with your credit union or bank. The bad news, your members/customers will have another way to interact with your credit union or bank.

Apple Watch introduces a whole new interaction channel, wearable technology. Just like the ATM, computer, mobile phone, and tablet; wearable technology is the next technology channel that your members/customers expect and will want to be able to use to interact with your financial institution. 

What makes wearable technology and Apple Watch in particular different, is the small display surface available on Apple Watch. Apple recognized this limitation and went back to the future to create a digital crown, similar in concept to the Blackberry roller-ball. Using the crown on the side of the watch allows interaction without covering the display surface. 

Call it a good start. The problem is Apple Watch is still highly reliant on manual scrolling and swiping to interface with the technology. That is a concept that is left over from the PC, mobile phone and tablet. 

Yesterday when Apple introduced Apple Watch it, was the "first generation". Remember the iPhone:
  • iPhone (1st generation)
  • iPhone 3G
  • iPhone 3GS
  • iPhone 4
  • iPhone 4S
  • iPhone 5
  • iPhone 5C
  • iPhone 5S
  • iPhone 6
  • iPhone 6 Plus

The first generation Apple Watch is undoubtedly going to be a long list of future versions of Apple Watch and other wearable technology solutions. What does that mean? It means reliance on manual scrolling and swiping to interface with the technology will evolve to voice, virtual assistant and behavioral predictive technology. For credit unions and banks it means another technology solution that must be incorporated into their channel strategy. A technology solution in which the rules will rapidly evolve.

It is exciting times for fintech providers and consumers, but I am not sure credit unions
and banks feel that same level of enthusiasm. The milestone marker just changed and many credit unions and banks are still trying to adjust to mobile technology. Moore's law suggests that the pace of technological change doubles every two years. 

Most credit unions and banks have not been able to fully assimilate the mobile space and the opportunity mobile presents. How are those same credit unions and banks going to handle wearable technology such as Apple Watch?
The fact is the pace of technological change and the costs associated with the technology is beyond the scope and capability of all but the largest national and regional banks. Credit unions and banks, ...... the walls are closing in on you and your corner is looking dark. How can you change the game and give your credit union or bank an opportunity to survive and thrive?      

Through cooperation. Technology solutions and non-member/non-customer facing operations do not have to be owned, controlled and executed by each credit union or bank. Credit unions and most banks simply cannot keep up with the technological change and the costs associated with technology solutions. Instead, a new cooperative entity needs to be created to handle all technology and non-member/non-customer facing operations. Through the use of shared resources true economies of scale can be achieved, but it must include both technology solutions and back-office operations in order to realize the full true cost savings. It may be radical thinking, but based on the prognosis for credit unions and banks, it may take radical action to change the paradigm. Sometimes radical surgery is required to save the patient.

The time to act is now. Remember Moore's law, the pace of technological change doubles every two years. You are already behind and you do not have time to wait before the next technological leap occurs.  



  1. The rapid developments in technology is, probably inevitably, relentless : but the big unanswered question is, how will users react to the constant bombardment and pressure to stay up with the advances or be left behind.

  2. Like any technology or new innovation you have:

    1. innovators
    2. early adopters
    3. early majority
    4. late majority
    5. laggards

    Everybody adopts technology and innovation at their own pace.