First, its official, American Banker has referred to apps built for wearables as “watch banking” so that’s the term we can all use when we struggle for what to call this new channel. Gosh, glad that’s been settled. There has been so much written and discussed in the past few weeks about wearables. We, too, are excited about the new channel and have a bunch of customers going live with watch banking on the day Apple launches their devices. And we are already planning for our second version of the app.
What’s interesting, when thinking about wearables, is the issue of secure login. As I have learned, there ain’t no keyboard on a smartwatch. First, understand that V1 of watch banking mainly contains glances of data that are presently available in mobile banking apps. For example, you can get a quick balance view without having to log in. Watch banking has extended the quick balance feature to a new, easily accessible screen that sits right on your wrist, again without having to log in. It’s still secure and authenticated but no ID and password data entry is required, particularly convenient when dealing with a significantly smaller mobile device.
In V2 of watch banking we will go beyond glanceable data and move into transactions. This requires additional security to make a payment, for example. Or what about ACH approvals? You better have the end-user sign in for that. So, how the heck do you do that on a tiny device without data entry functionality like typing in a user ID and password? What’s funny is that login failures already hover at 15% on the much larger smartphone. That means people fail to log in more than 1 out of 10 times. Imagine how bad this will be on the tiny Watch! But alas, there are solutions. PIN-based login is very feasible. This is where an end-user has already set up a four digit PIN for mobile banking and it can be extended to the Watch. Out-of-bank authentication can be used to send a one-time passcode to the end-user via their mobile device and this code can be entered into the Watch.
Thankfully, there are solutions but these solutions will require us to embrace new technologies and new security alternatives that some have been reticent to implement in the mobile channel. If your compliance folks won’t let you implement a quick balance feature, you are a long ways away from adding transactions to watch banking.