Treasurers gear up for wearables

Published: May 2023

The possibilities of wearable technology are exploding, and many industries are taking advantage of the speed and convenience that the technology has to offer. Not only does this mean increased efficiencies for the treasury and finance teams, treasurers could be soon wearing them to do their day job.

In the not-too distant future wearable technology could be a part of your everyday life. Need to monitor your blood pressure? Take a pill, and the tech inside will continuously do it for you. Need to work out? Put on some vibrating yoga pants to make your poses more effective. Want to make contactless payments? Embed an NFC chip in your arm, just tap your wrist and go. That might be a bit extreme, and most people are opting for a smart watch or ring instead. Such devices are becoming more commonplace, and the possibilities of wearable technology have mushroomed in recent years. No longer the preserve of tech geeks, many industries are taking advantage of the technology and wearables could soon be coming to a corporate treasury near you.

“Wearables are all about efficiency and taking steps out of a process,” says Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research. When it comes to finances and corporate treasury this can translate into greater efficiencies with payments, for example, and increased profitability. And some other benefits for companies could be enhanced productivity, enhanced speed and greater accuracy.

And, unlike smartphones, wearable technology is usually worn all the time, making it much more convenient. An avid wearable user, Bodine uses his smart watch for fitness tracking, listening to music, making and receiving calls, and paying for goods using the tap-and-go contactless function. This is just a glimpse of what is possible with the technology, which is expanding into many other forms.

DelveInsight, for example, notes other wearables – aside from the smart watch – that are becoming popular include: smart bands, smart jewellery, smart clothes, smart glasses, implantables, smart helmets and smart hearables. And these devices are being used for real-time monitoring, proactive healthcare and activity tracking, for example.

Such smart devices are becoming more mainstream, and the pandemic increased interest in general usage of wearables. In the wake of COVID-19, Gartner estimated that global spending on wearable devices would total US$81.5bn, an 18.1% increase from 2020. This was put down to an increased interest in consumers in tracking their own health, as well as a greater interest in wellbeing and fitness. Also, more people were buying ear-worn devices as they were relying on these devices to work remotely. Another consequence of the pandemic, Gartner notes, was that people were more engaged in e-health and monitoring their wellbeing and interest in smart patches grew.

Bodine gives an example of this wider trend: pulse oximetry, or measuring the level of oxygen in the blood. During the pandemic, this metric became important for those who were suffering from Covid and it is also a good indication of overall health. And such technology, Bodine says, could be used by companies to monitor the health of their employees. If, for example, a long-distance driver’s oxygen level indicates they are tired or unwell, they could be stopped from undertaking a potentially dangerous journey.

Kane McKenna, Wearables Analyst at CCS Insight, says that in recent years there has been particular interest in wearables for activity tracking, health and wellbeing. This has mostly been with individuals looking after their own health, but this data could be useful for companies as well. Insurance companies – such as life insurer Vitality Insurance – incentivise customers with better rates if they use fitness trackers, for example.

Another recent development, notes McKenna, is with femtech – or women’s health – with apps such as fertility tracker Natural Cycles. This solution can now be linked to a wearable to remove some of the steps in the process. Previously, someone who is tracking their fertility would take their temperature at the same time every day and log it manually in the app, which then analyses and predicts peak fertility. Now with a wearable, which automatically reads their temperature, it is done automatically. It is possible, for example, to use the Natural Cycles app with a Samsung sensor and smart watch, as well as the Oura Ring, a smart ring that is typically used by individuals to monitor and analyse the quality of their sleep.

Other applications include continuous glucose monitoring for diabetics, which links a smart sensor on the individual’s upper arm to the app. This feeds almost real-time data on glucose levels which can be shared with multiple parties, such as doctors, or, in the case of a child, a parent. There are numerous other potential applications in the healthcare field, such as monitoring heart conditions, or other remote patient monitoring, which will free up capacity in hospitals – as patients can be assessed from their own home – and doctors are able to work remotely.

Aside from the obvious applications in healthcare, Bodine says that logistics is another obvious use case for wearables. “In logistics, wearables are making a huge impact,” he tells Treasury Today. For example, wearables can be used to confirm the receipt of goods, which can then trigger the payment. When a delivery truck arrives at the store, for example, the driver unloads the crates, the shopkeeper acknowledges the delivery by tapping their smart device against the driver’s reader and the data is sent automatically. This is a far more efficient way of doing things than giving the driver a cheque, which is taken along with a bundle of others back to the depot, to be passed on to the finance team, to be processed for payment, which will happen days, if not weeks, later. For the finance and treasury teams in such companies this makes things more efficient, reduces the days sales outstanding (DSO), and is ultimately more profitable, notes Bodine.

In financial services, a very noticeable application of wearables has been for contactless payments. Instead of tapping a card or a smartphone, the user taps a smart watch, bracelet or ring on the reader, which is often used for public transport. Another use case is in closed-loop environments such as theme parks or sporting events where the ticketing and spending can be done from the wearable. Someone could tap their bracelet to enter through the ticket gate, to go on a ride, and also pay for their lunch.

McKenna explains that contactless payments isn’t why people buy wearables, however. CCS Insight does an annual survey and has consistently found that health and activity trackers are often the reasons for users to buy a smartwatch or upgrade. Although contactless payments are low down on the list of reasons to buy a smartwatch, once people have purchased one, they may also use it for that reason as well.

And the smart technology is moving to smaller devices, and so wearable payment rings are increasingly common, which – unlike paying with a smartphone or card – saves on the need to rummage through a bag to make a payment.

Another reason to enjoy contactless, points out Bodine, is the aversion to touching surfaces that occurred since the Covid pandemic. He gives the example of an executive who is travelling on business and pays using their smartwatch for the hotel, and for their car. It’s not just the ease of making the payment, but also the data that is now flowing on the backend to get the transaction cleared, settled and reconciled – all possible to do without the need for a paper receipt or onerous expense claims on return to the office. “With the advent of instant payments – with real-time payments from The Clearing House and FedNow payments – that is going to clear and settle within 20 seconds,” says Bodine. Also, it all happens without having to touch a thing.

Anything that sees payables and receivables getting processed more efficiently is good news for treasurers. And in their day job, as part of managing their banking relationships, wearables are also becoming a feature.

Bank of America, for example, integrated its corporate treasury platform, CashPro, with Apple Watch, to tokenise the wearable technology. This means that treasurers, and other users of the platform, can generate a one-time password from their smart watch, instead of carrying around a bulky physical token. The bank told Treasury Today that it has plans to introduce a more frictionless method for users to authenticate themselves with a token via their Apple Watch. This method is particularly convenient for people who are travelling and don’t wish to take the banking tokens with them – treasurers often have several devices ie one for each of their banks – which is not only cumbersome but incredibly inconvenient if they forget to pack them. With this approach, all they have to do is install the CashPro app on their Apple Watch.

Bank of America is one of a few banks that offer a mobile token on the Apple Watch. When asked if this idea of CashPro integration had been extended to other wearables, Jennifer Sanctis, head of CashPro App and Personalised Technologies in Global Transaction Services at Bank of America, told Treasury Today that the team is currently in a discovery phase regarding the application of wearable technology to support treasury operations.

Sanctis added that the bank has filed a number of patents related to the technology with the United States Patent and Trademark Office. She commented, “We don’t have other wearable-enabled solutions as yet, however, we think the technology will become increasingly prevalent.” When asked to comment on the other potential uses for treasury solutions, she said: “The possibilities of how wearables can support treasurers are limitless. The patents that we have under review range from how wearables can support data reporting, the use of smart glasses, communicating with service agents and enhancing content through AR and VR [augmented reality and virtual reality].”

And beyond these applications, there is also the potential for wearables to be used for user authentication by using biometrics. McKenna explains this could be similar to how fingerprints or face scans are used to unlock smartphones. He sees potential for biometrics and wearables in the treasury environment for authenticating bank customers, for example.

Bodine comments that there is no reason why you couldn’t have biometrics in the corporate treasury environment. It is common to have cameras on phones and laptops, why not extend this to retinal scanners? And with other uses of biometrics, Bodine comments, “Our eyes and fingers are wearables,” which opens up even more possibilities.

McKenna points to a trend of biohacking, which takes the idea a step further, where people have self-implanted a payment chip so they can pay more easily and conveniently. Maybe this is a glimpse of what the future will look like, but for now most treasurers will probably opt for the more mainstream smartwatch.

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