Can the banking sector learn lessons from the iPhone X?

Australia's new real-time payments system is undergoing final testing before a public launch next month.

Every year, the tech world goes through its ritual autumnal excitement as it eagerly awaits the inevitable launch event showing what Apple has in store for us with its latest iPhone. The iOS-maker may be one of many companies competing for our attention in today’s crowded marketplace, but given its history of innovation, where Apple leads, the rest of the industry tends to follow.

And this year may be particularly significant as the company used the tenth anniversary of the release of the first iPhone to introduce what it claims will be the most revolutionary device since then – the iPhone X, which hits shelves today.

It’s hailed by the company as “the future of the smartphone”, and naturally, many people have been asking how it could change the tech landscape far beyond the world of smartphones.

The banking sector is one part of the economy that may be paying particularly close attention. As banking becomes more and more mobile, the innovations and technologies contained in the iPhone X and its inevitable followers could prove invaluable to the financial services sector, helping change the way people interact with their bank and manage their finances.

Indeed, several voices within the industry have already begun speculating about how some of the new technologies introduced with the iPhone X can help their industry. But is it really likely to have an impact? Let’s look at some of the claims:

A new era for biometrics?

Biometrics in the form of fingerprint scanners have become an increasingly popular option for authentication among many banks, as they offer both convenience and a strong level of security.

However, Apple is looking to buck this trend with the iPhone X, which removes the Touch ID authentication the company helped pioneer. Instead, it now offers facial recognition based on a 3D scan of a user’s face so – in theory – a user can confirm their identity simply by glancing at their phone.

But the question remains as to whether this will be both a practical and more secure alternative to Touch ID and similar fingerprint-based options. Face ID is still a new and relatively unproven technology – as the failure of the technology to work during the iPhone X’s launch event shows.

For now, with the technology only available to those prepared to shell out a thousand dollars or more, its value remains to be seen, and will be dependent on other providers following Apple’s lead. Plus, with the average iOS user unlocking their phone 80 times a day – and 89 percent of logins on Touch ID-enabled devices using this method, it’s questionable whether there’s consumer appetite to change an accepted and familiar form of biometrics.

Improving mobile payments – or not?

Face ID functionality will also be incorporated into Apple Pay to boost security. Apple claims the chances of a stranger being able to fool Face ID is one in a million, compared with one in 50,000 for Touch ID. If this technology can make payments faster and more secure, it could help convince people who have until now been skeptical of the technology to finally give it a shot.

But again, there are questions over whether or not the technology will achieve this goal. Until now, if a user wanted to authenticate a payment, they simply have to press their finger to the Touch ID sensor. Now, it seems they will have to effectively take a selfie in order to confirm a transaction and, no matter how quick this process is, for many it will be less convenient than what already exists.

Will it drive enhanced AR?

Another feature showcased at the iPhone X’s launch was the improved augmented reality (AR) capabilities of the smartphone, highlighting how the new ARKit platform of iOS 11 works alongside the more powerful processor and upgraded camera. This could be a key step in moving the technology from an interesting gimmick to something that is much more accessible and practical for more advanced applications.

The banking sector has been increasingly interested in the potential of AR. For example, the technology could be used to overlap financing information over products in the real world, or help people visualize different savings options. For now though, the iPhone X may be seen more as a minor evolution that anything truly revolutionary. While the upgraded power of the phone compared with other iOS 11 devices appears to offer better selfie-based AR capabilities, this alone is unlikely to be the big step forward AR needs.


Written by Dan Weis

Dan Weis

Dan Weis works at NCR leading the retail banking mobile app team. The mobile apps are used by nearly 4.8 million consumers.

Read more articles from Dan Weis