The Future of FinTech Is Not Linked To Wearables

FinTech companies want to bring financial services to as many people around the world as they can. Especially the mobile market seems right for disruption, even though competition in this segment is quite fierce. The main question becomes whether or not creating financial services to be used through wearables is worth the effort or not.

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Are People Using Wearables, Or Just Buying Them?

Wearables were once touted as the holy grail of technological innovation for the 21st century, but that statement seems to hold less merit right now. Despite impressive shipment numbers for wearable devices around the world, the term “wearables” is being used very loosely, and not every device is labeled according to its proper terminology.

For most consumers, a wearable device can be anything ranging from a step counter to a fitness tracker, and even an Apple Watch. While all of these devices seem to resemble the term “wearable” in some way or another, there is very little product cannibalization taking place right now.

Smartwatches are becoming more and more popular due to their combined use cases. Not only can they display time, but also run applications, and keep track of fitness goals at the same time. At the same time, the general interest in fitness trackers has not diminished by any means, as not everyone sees the benefit of owning a smartwatch.

Regardless of how one wants to label “wearables”, they all have one thing in common: these gadgets are quite fun for a while, but they hardly motivate or incentivize users to keep wearing them for extended periods of time. This is especially true for smartwatches, as they offer nothing special compared to a smartphone. In fact, nearly every smartwatch still requires the end user to have a smartphone on them, which renders the entire concept a bit moot.

Wearables still make nice gifts for friends and family, especially with the holiday seasons coming up in the next few weeks. However, if people stop using their device after a few months, they make for very expensive gadgets, and nothing more. No one is saying the wearables “hype” is coming to an end anytime soon, but there is little point in developing any financial services for this type of device.

FinTech Development Should Focus on Devices People Use

At this time, there is no point in developing any financial tools for the wearable industry, simply because the trend isn’t catching on the way manufacturers would have hoped. Smartphone usage, on the other hand, is booming all over the world, especially where developing markets are concerned.

It only makes sense for the FinTech industry to focus their attention on the desktop, laptop, and mobile users for the foreseeable future. Especially in underbanked countries, where there is little to no financial infrastructure to speak of, FinTech could make a major impact over the next few years.

Mobile services will play a key role in the evolution of the FinTech industry as people want to be in control of their finances at all times. Keeping funds on their mobile device, as well as sending and receiving money, should be as simple as a few taps on the screen. As long as FinTech companies can provide that type of service, things will be heading in the right direction.

What are your thoughts on the status of wearable devices right now? Will the trend reverse at some point? Let us know in the comments below!

Source: The Verge

Header image courtesy of Sourcing Journal Online

Originally published at Fintechist.