Apple’s rollout of its new smartwatch met with a predictable lack of love today. The undercurrent of many news reports was that it lacks a killer app, that it’s too pricey, and that it fails both as a gadget and a fashion item.

But here’s one important message for financial institutions: None of that means a certain few of you shouldn’t be investing in a smartwatch app right now. It’s worth noting, for example, that Fidelity Investments was quick out of the starting blocks to announce its Watch app, which will enable a number of its do-it-yourself investors to monitor stock quotes and trade alerts, and then execute trades on their iPhones.

Is it a killer app? No. Is it going to significantly reduce attrition? No. Will Fidelity save big bucks because trades will be executed more cost-effectively? No.

As Ian Benton and I said in July 2014 – in Investing in Wearables for Financial Services – Why Now?– that’s not the ROI that matters today. What Fidelity gets out of this is a bit of attention that buffs its image as an innovator, and a place where on-the-go investors can feel in control no matter if they are dashing through an airport, commuting on mass transit, or even running a half-marathon. For a presumably small investment to write the proverbial a “few lines of code,”

Fidelity succeeded in grabbing headlines – a.k.a., free advertising – that won’t be there for many others. That’s not the only reason innovative FIs and fintech vendors should be investing in smartwatches in particular and wearables in general, though. The longer-term reason is to develop capabilities that will apply not only in wearables but also in online banking, mobile banking, and other digital technology. That list starts with integrating financial updates, insights and advice into virtual assistants that will help consumers organize their busy lives on smartphones and wearables.

But the day will come when wearables will provide a hands-free, voice-centric, heads-up experience that stands apart from smartphones. What such technology will look like is unclear – will it be an Apple Watch, a descendent of Google Glass, or something yet to be conceived? But that experience will likely rely on advances in notifications, data mining, speech recognition, payments, biometrics, geolocation, gamification, and augmented reality. Is the Apple Watch enough of a catalyst? Not if you limit your thinking to today’s news and listen to the told-you-so naysayers. But at some point wearables will perform a multitude of financial tasks. If you’re a forward-thinking fintech strategist, the question to ask today isn’t whether to invest, it’s a matter of when to invest.


About Mark Schwanhausser

Mark Schwanhausser is JAVELIN’s Director of Omnichannel Financial Services. Mark strategizes how financial institutions (FIs) can track and serve customers across whatever channels they use, and provide a consistent, integrated brand and user experience. Mark helps banks and credit unions profitably enable customers to monitor and manage their money more intelligently through technology such as online banking, mobile banking, personal finance management, financial alerts, and technologies on the horizon like wearables.

Mark led the development of JAVELIN’s Financial Journey Model, which builds digital banking on a foundation of 10 time-tested personal finance principles, and JAVELIN’s holistic segmentation, which enables FIs to prioritize their investments to serve the critical needs of the profitable Moneyhawks™, high-value Traditionalists, and up-and-coming Emergents. His other work in 2015 has focused on how banks and billers can turn off paper statements by closing the “digital commitment gap,” why digital account opening has reached a tipping point, and how FIs can use alerts and notifications to initiate daily “conversations” with customers.

Before joining JAVELIN in April 2008, Mark worked for nearly 26 years at the San Jose Mercury News, mostly as a personal finance reporter writing about money and emerging trends in financial services and payments technology.

Mark has a bachelor’s degree in journalism from the University of Missouri at Columbia and attended Antioch College.

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