When the Form Factor is the X Factor

Most of the discussion around technology and financial services focuses on software and related services—new apps and capabilities, upgraded tools for security, platform shifts in the infrastructure, etc. But there’s another angle that deserves greater attention and is starting to get it: hardware.

Consider Google Glass, the newest innovation from one of the world’s most innovative technology companies. By now, the early details have been widely documented: it’s a head-mounted computer that obeys voice commands to perform a wide range of functions, from searches to taking pictures and sending messages, all hands-free. This makes a critical difference, as Google founder Sergey Brin just demonstrated during his appearance at TED. Looking down at a smartphone has the unfortunate side effect of disrupting social interaction with other human beings; with Google Glass, you don’t have to do that.

But these rudimentary functions are just that; they represent the nascent form of an emerging technology. What will this form factor be able to do, and enable us to do, a year from now? More specifically, how will it affect financial services? What, if anything, does it have to do with banking?

We don’t necessarily have the answers yet, but they go to the heart of why this question of hardware is so important.

First, it’s clear that (once compatibility issues are resolved), many banking apps currently available, from account information to geo-location, can be overlaid onto this new platform. Looking a little bit ahead, it’s even possible to visualize (pun not intended) a scenario in which, say, investment professionals receive instant market alters and make adjustments to their portfolio without any change to their habits and public demeanor. But in this age of rapid advances, even that doesn’t seem much of a stretch.

The point of a brand new form factor is not only that it enables us to more easily do what we already do, but that it enables us to do new things, which in turn affects our behavior in a positive way. The reality of ‘wearable computing’ has never quite lived up to the potential. Could Google Glass be the one that finally breaks through?

Consider the changes wrought by smartphones and tablets. This market didn’t exist just a few years ago, and now we’re coming up on 800,000 apps for the iPhone alone. It’s impossible to overstate the importance of hardware in this mix. In fact, it’s now estimated that mobile banking will be fueled in part by smartphone cameras. Well over half of all iPhone users favor mobile deposits, while 42% of mobile bankers say they’d like to use photo bill pay.

Inevitably, there’s a downside to all this. The bad guys know there are ripe pickings in this market, which is why, for example, cybercriminals are launching sophisticated hacks such as through near field communications (NFCs) on mobile devices in public areas. The more devices we have, the more attacks there will be.

Google Glass is still in its infancy; the company has put the technology in the hands of some 8,000 testers (who had to apply for the privilege by writing as essay on how they might use it). It’s not expected to be generally available until early next year.

Betting on a nascent technology is always a risky proposition, especially when it involves a new form factor. Moving forward, it will be interesting to see how (or whether) it gains broad-scale adoption, and which particular applications find an early audience.

But if history is any guide, we know this much. The app developers who are first out of the gate with tools that don’t just tweak existing releases but play to the strengths of the form factor itself will be the most successful.

Written by Banking.com Staff