Wearable devices will give rise to new companies, cripple those that fail to adapt
Something significant is happening to the Internet regarding what we wear rather than visit to. The reality is that ‘Wearable technology’ is everywhere, from globally famous Google Glass to the plethora of fitness trackers like Fitbit. More than 17 million wearable devices, including smartwatches and fitness wristbands are expected to shipped worldwide in 2014 alone, according to various research companies. In the last two years alone, a multitude of devices have exploded onto the scene, promising to change the way we perceive and interact with technology as profoundly as iPhone has done for more than seven years now. ‘Wearable tech’ is part of the larger wave of the ‘Internet of Things’, with a potential economic impact of up to US$6.2trillion annually by 2025, according to recent McKinsey report. Think of the new products and ‘things’ such as light switches, heart rate monitors, cookers, washing machines that are connected to the Internet as well as other services.
A handful of banks and other financial institutions have chosen to participate in wearable tech trials but what’s needed is a complete mindset change, if banking services providers are to harness the power of this new wave in technology. Big Data will no doubt get a lot bigger with 9 billion devices capturing our every move. Converting all this data into actionable insights for the consumer is going to make a lot of companies very successful and those who do nothing, possibly obsolete. Self-limiting mindset prevailing in the banking industry will be their biggest undoing more than regulatory environment. Banks will need to be able to capture data from multiple sources not just financial transactions and aggregate these to provide intuitive and actionable experiences for their customers. I believe banks should to be incredibly excited about this opportunity to transform.
Take for example, a manufacturer who make smart healthcare products like blood pressure monitors, weighing scales and activity trackers, which beams wirelessly to our smartphones. These are called sensory insights that the feed into an ecosystem of apps that allow you to overlay the data points with those of others, such as diet, exercise and sleep and also helps to map your health completely. Various studies have estimated that there will be 1.9 billion the current number of devices enabled for the Internet of Things, and expects this to exceed 9 billion by 2018, more than all the world’s PCs, tablets and mobile devices put together. Before getting that far, banks have some important challenges to address, not least the new breed of risks introduced by wearable tech. Creating appropriate security standards for the Internet of Things is necessary but I personally think it will take time.