The Many Challenges of Fitting a Bank on a Customer's Wrist

Nothing better illustrates the daunting pace of technological change than asking several financial services executives this question: are you going to create wearable apps for your customers?

"Wearables? We have to work on our smartphone app!" one said at the InVest conference last week.

"Wearables? We have to work on our website!" another attendee said.

They all acknowledged that they would have to do a watch app at some point, but it seemed far down the priority list for many.

And yet, wearables are here.

Apple has sold 2.8 million of its smartwatches, including 1 million on the first day of pre-orders, and 3,500 apps have been created for the device.

Nearly a third of U.S. smartphone users owned or planned to purchase a wearable device in the next 12 months, according to April 2015 research by PowerReviews. Among this group, 82% wanted them to enhance their in-store experience and 22% specifically wanted them to provide touchless, one-click payments.

Meanwhile, a third of 1,000 online investors surveyed by E-Trade Financial would like to monitor their investments on wearable apps.

The bottom line: financial services companies have a lot of work ahead to meet consumer expectations.

Some have already made strides. Citigroup, Tangerine Bank, Customers Bank's mobile-first unit BankMobile, and USAA have created Apple Watch apps. They quickly learned just how hard it is to communicate a lot of information on such a little screen.

Citi's Mobile Lite app provides customers with a glimpse at their account balances, their last five transactions for each account and push notifications about credit card spending. Graphic images and colors tell customers how close they are to their credit limits. If they spend a lot, a bar will jump in size. It turns orange when they near their credit limits and turns red when they hit their limits. Mobile Lite also works with the Apple Pay app.

Citi tries to adhere to three design principles in its wearable apps, said Andres Wolberg-Stok, global head of emerging platforms and services: intimacy, importance and immediacy.

"You have to make sure it's relevant enough for you to justify taking up space on your wrist, taking up a slice of your attention," Wolberg-Stok said.

Similarly, the E-Trade Apple Watch app provides a snapshot of how the market is doing.

"You can see the trends happening over the course of the day and get a summary of account information that's pertinent to you," said Liensa Rouse, senior manager of mobile product management at E-Trade. The customer can dive into each position to find out more.

E-Trade also offers customizable notifications. "It's imperative to find out what sorts of notifications customers would like to receive on their watch, whether a position is dramatically fluctuating over the course of the day, [if] there's breaking news, [and] things that allow them to make choices in that moment," Rouse said.

Special Design Considerations

Several unique design considerations have to be confronted in developing an app for a watch.

The first and most obvious is the tiny size.

"We'd never designed anything for a screen size this small," Rouse noted. "So our main challenge was adhering to the discipline of really focusing on what information is most pertinent to the customer and what information is very time-sensitive. We had to make sure everything is lightweight, so customers can easily open for more information and close it out."

Another challenge is that there is no way to sign in on the Apple Watch, which means companies can only provide the types of information for which they do not require two-factor authentication.

In the case of early adopters like USAA, Citi and E-Trade, an added level of difficulty came from the need to design their watch apps before the Apple Watch came out – Apple did not provide early access to the device.

"The hardest part of developing the app was testing on the simulation software instead of the actual device," said Neff Hudson, head of emerging channels at USAA.

Citi's developers started out with drawings on a white board, and quickly realized that was not working. They then printed out 3D renderings of the Apple Watch, and printed and glued little screenshots of the app on them, to see how the font sizes and colors showed up.

E-Trade relied on simulators and human ingenuity. "You could see people walking around the office holding their phone to their wrist and trying to get an idea of, do the colors work?" Rouse said. "Is there enough variation? Am I able to read this at a glance? It was fascinating."

Then there's the physical challenge of having to hold your wrist up for extended periods of time.

"It seems completely trivial, but when you hold up your wrist for more than 10 seconds, you start to mind," Wolberg-Stok said. Citi's designers tried to streamline and shorten interactions in response to the problem.

There were also some unexpected obstacles: fingers. "Even if you have normal size fingers, if you put your finger on the screen, you can't see a thing," Wolberg-Stok said.

Another challenge was that Apple Watches cannot be used without a compatible smartphone nearby, linked by Bluetooth. That means the customer experience has to flow naturally from one device to the other.

"If I get an alert about something happening in my portfolio, I can check it out a little further on my watch," Rouse said. "But If I want to dig into it, do more research or even conduct a trade, I could then pick up my phone, and with a quick swipe I'm there [and] I can quickly transition within that same flow."

The presence of the phone could also be seen as a benefit because it's unnecessary to fit all the functionality of the phone app onto a watch. "It's about that balance, about focusing and providing those key pieces of information on your watch and allowing the user to dive in on a different platform," Rouse said.

Envisioning Future Apps

Few Apple Watch apps today allow actual transactions. An exception is Canadian Imperial Bank of Commerce, which recently introduced the ability to transfer funds between accounts. E-Trade is considering but has no immediate plans to let people place trades on their watch.

"Our first iteration was about providing that monitoring capability, providing time-sensitive information to enable you to make decisions quickly," Rouse said. As customers become more comfortable doing things like trading or money transfer on a watch, the company will add those features.

Figuring out the context of Watch use is a big piece of designing features for it, Rouse noted. "When are people wearing the watch? Do they have their phone nearby? Is it in a bag?"

But anything that requires complicated interactions is not likely to find a home on a watch app any time soon.

"If you think typing on a smartphone is hard, this is that problem on steroids," Wolberg-Stok said.

Both Citi and E-Trade envision the possibility of designing apps for Android watches, when and if customers adopt them.

And USAA may make its Apple Watch app part of its overall drive to improve personalization.

"We will continue to enhance and evolve the application in future releases," Hudson said. "While it's still early, we believe that wearable technology has tremendous potential for innovation in everyday spending, identity and personal health."