Atom Bank keeps faith with wearable technology

The chief executive of Atom Bank is looking to wearable technology for the future of banking in spite of concerns about customers resistance.

Mark Mullen, co-founder of one of the UK's first digital-only lenders, aims to provide an application for smart watches after Atom launches this year.

"I think wearable technology has a long-term future in creating an ecosystem of connective technology held together by the cloud," said Mr Mullen.

Apple is launching its watch this month in a move that will be tracked by lenders and payment providers keen to make their banking applications available on wearable devices.

Barclays is one of the first banks in the UK to release an app for the new Apple watch, ahead of its official launch.

The lender unveiled the app on Wednesday, allowing customers to check their current account balance on the go.

Mr Mullen said customers will expect to be able to continue to use bank services regardless of the device they use, whether a mobile phone, smart watch or application in the home.

"I think we will be one of many looking to optimise better services. The customer has to buy this technology and it's about whether we respond or not," he said. "I think the Apple Watch is one example, but portable technology generally has a long way to go."

The bank plans to raise at least another £75m from investors over the next couple of months ahead of the launch, say people familiar with the matter.

Wearable devices have yet to take off, and some have been pulled from the market - leaving a number of experts sceptical.

Lu Zurawski, retail banking solutions head at ACI Worldwide, an electronic payments systems company, said take-up of smart watches is slow because they are seen by many "as a bit geeky and obscure".

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Critics say sales of other wearable devices, such as the Google-powered Android Wear watch, have been relatively muted.

Figures from Canalys, an independent analyst company, show only about 720,000 Android Wear devices were sold last year, out of a total of 4.6m smart wearable bands. "Android Wear will need to improve significantly in the future, and we believe it will do so," said Daniel Matte, an analyst at Canalys.

Nationwide, for example, was one of the first UK lenders to launch an app on the smart watch last November, using Android Wear. It gives customers access to their real-time account balance and enables them to manage money on the move, the bank said.

Judah Levine, chief executive of Mondato, a consultancy firm for mobile financial services, said: "The watch as a functional device felt pressure from the phone and it became a fashion accessory. So the watch is being revised as a functional tool.

"I'd be surprised if you see wearables serving as a core 'wallet' in the next few years."

Other wearable devices have been shelved. At the start of the year Google stopped consumer sales of its inaugural Glass eyewear which displays information in a smartphone style guided by voice commands.

But a number of banks had already developed apps for the device, among them Caixa Bank and Banco Sabadell, the Spanish lenders.

Ryan Rubin, a managing director at Protiviti, a global consulting company, said it will "take time for people to catch on" to wearable devices but it is "not going to happen any time soon".

"In general using mobile as a payments device is in the early days and there are still quite a few associated risks," he added.

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