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BANKING ON THE APPLE WATCH Time to Deliver Apps to Excite Clients

November 2015

MyPrivateBanking Report

Report Extract Original Report with 33

pages plus comprehensive data appendix

BANKING ON THE APPLE WATCH | 2

CONTENTS

TABLE OF CHARTS 3

1.0 EXECUTIVE SUMMARY 4

2.0 APPLE WATCH – THE NEW MUST-HAVE OR JUST ANOTHER FLASH IN THE PAN? 6

2.1 APPLE’S LATEST FLAGSHIP – PROGRESSING ON SCHEDULE OR FALLING BELOW EXPECTATIONS? 9

3.0 HOW THE DIGITAL BAR SET BY OTHER INDUSTRIES RAISES CLIENT EXPECTATION 11

3.1 NEWS AND MAGAZINE APPS 11

3.2 TRAVEL APPS 12

3.3 VOICE CONTROLLED APPS. 13

3.4 GAME APPS 14

3.5 MESSAGING APPS 15

3.6 CALENDAR APPS 16

4.0 STATE-OF-THE-ART APPLE WATCH BANKING 17

4.1 RANKING TABLE 19

4.2 STRENGTHS AND WEAKNESSES: BANKING APPS' OVERALL PERFORMANCE ON THE APPLE WATCH 20

5.0 SUMMARY AND OUTLOOK: AN APPLE WATCH ACTION PLAN FOR EVERY BANK 29

6.0 AUTHORS 32

7.0 DISCLAIMER 33

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TABLE OF CHARTS The wearables device market value from 2010-2018 .................................................................................. 6

Top five smart wristwear OS shipments, market share, and 5-year growth rate ........................................ 7

The Apple Watch banking app boom ........................................................................................................... 8

The BBC News Apple Watch version .......................................................................................................... 12

Find Near Me .............................................................................................................................................. 12

British Airways and TripAdvisor ................................................................................................................. 13

Joy for Spotify – Watch & Voice Controlled Music..................................................................................... 14

Trivia Crack ................................................................................................................................................. 14

Facebook Messenger ................................................................................................................................. 15

Telegram Messenger .................................................................................................................................. 15

WeChat ....................................................................................................................................................... 16

Fantastical 2 for iPhone – Calendar and Reminders .................................................................................. 16

Summary statistics: features offered by the Apple Watch banking apps .................................................. 20

DBS PayLah! and Wells Fargo at Hand welcome screens ........................................................................... 21

Credit Suisse Private Banking Schweiz watch list ....................................................................................... 21

CIBC Mobile Banking quick fund transfer and Danske Bank transfer confirmation ................................... 22

Westpac Mobile Banking cardless cash withrawal .................................................................................... 22

Citi Mobile® branch finder and Westpac Mobile Banking branch finder ................................................... 23

BNP Paribas Mes Comptes slideshow ........................................................................................................ 24

ABN AMRO Alert & Check financial overview and past transactions ......................................................... 25

Société Générale l’Appli financial overview and Barclays Mobile Banking’s screen meter ....................... 25

BBVA │ España financial overview ............................................................................................................ 25

CommBank Mobile account balance and cardless cash withdrawal.......................................................... 26

CommSec portfolio performance and watch list ....................................................................................... 27

iTunes user comment ................................................................................................................................. 27

Mes Comptes: Weather feature, push notifications and contact options ................................................. 27

Meine Bank’s branch finder and FinanzPlaner tool ................................................................................... 28

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EXTRACT OF EXECUTIVE SUMMARY (Executive Summary in full report page 4 to 6)

Despite the rapid market growth of smartwatches, and in particular the Apple Watch, the Apple Watch banking apps are not living up to their promises. This is a key finding in the new report “Banking on the Apple Watch – Time to Deliver Apps that Excite Clients,” for which the Swiss research company MyPrivateBanking Research analyzed and ranked the Apple Watch banking apps offered by 22 leading retail banks worldwide.

According to the MyPrivateBanking benchmarking, none of the apps evaluated achieved the maximum possible 15 points, highlighting how the current Apple Watch apps are not delivering a comprehensive experience. The highest score was only 9 points and this was jointly achieved by five banks: ABN AMRO, BNP Paribas, Citibank, Commonwealth Bank of Australia, and Deutsche Bank.

Apple Watch Apps Underperforming in Personalization

In MyPrivateBanking’s view, the main weakness of the Apple Watch banking apps that were analyzed is the lack of personalization features. The analysts see this as a major drawback as personalization of discounts, rewards, news, suggestions and product offerings will increasingly become the determinant of a successful banking app.

“It is promising to see that a fair share of banks started developing an offering for the Apple Watch early on; however, in terms of offered features and functionality, the opportunities offered by wearable technologies have only scratched the surface so far,” states MyPrivateBanking analyst Carmela Melone.

Two areas scored the highest overall in the report. Firstly, 55% of the maximum points were achieved for the provision of help features supporting clients in using the Apple Watch app. In some cases, the apps offer slideshows explaining the apps’ main features; in other cases there are comprehensive FAQs available for the corresponding iPhone version. The same percentage of points was achieved for the provision of a financial overview, such as displayed account balances and past transactions, as well as for integrating a graphical overview allowing clients to view their financial situation at a glance.

Besides taking a close look at Apple Watch apps, this report explores the wearables market in general and presents some estimation of how it will develop in the next few years, reviewing the digital device landscape and how this development is disrupted by the launch of the Apple Watch. Based on our analysis the study makes a forecast of the Apple Watch upcoming releases and potential best-of-breed solutions to be provided by banks.

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Three Strategic Implications for Smartwatch Banking Apps

MyPrivateBanking sees the wearables trend, specifically the Apple Watch, as one of the most significant opportunities for banks to deliver real-time, context-aware services that help people to live a life of financial wellness.

The report identifies crucial strategic considerations banks must make when developing a smartwatch app. These insights provide a guideline for banks that want to be prepared and armed when joining the war for clients’ attention:

□ In new technology we trust. Embracing new technology trends such as the Apple Watch promotes an attentive, forward-looking brand and can allow banks to reach valuable new audiences, e.g. young consumers, millennials and early tech adopters with disposable income.

□ Always on trend. The combined potential of a very personal gadget and its propensity for real-time alerts and location-based services makes the Apple Watch a candidate to become the hub of banks’ context-aware digital strategies.

□ Be ‘on hand’ for money movements. With mobile payments and remote deposits set to become the dominant channels for these transaction volumes in the future, devices such as the Apple Watch present banks with a huge opportunity (not to mention processing cost savings).

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2.0 APPLE WATCH – THE NEW MUST-HAVE OR JUST ANOTHER FLASH IN THE PAN?

In times of rapid technological development, it can be hard to predict whether a new trend will persist or peak and fade away.

(… more in full report, pages 6 to 10)

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3.0 HOW THE DIGITAL BAR SET BY OTHER INDUSTRIES RAISES CLIENT EXPECTATION

(… more in full report, pages 11 to 16)

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4.0 STATE-OF-THE-ART APPLE WATCH BANKING

We caught a glimpse of the global banks’ first forays into the smartwatch space when evaluating the mobile banking apps of the 35 largest retail banks worldwide.

(… more in full report)

Based on our analysis of the functional capabilities of these apps as well as other financial services apps not included in this survey, we defined a list of nine most basic features for smartwatch banking apps – the least common denominator so to speak:

Criteria Description

Financial overview (… more in full report)

Transactions (… more in full report)

Notifications/alerts (… more in full report)

Market information (… more in full report)

Branch finder (… more in full report)

Contextuality (… more in full report)

Contact option (… more in full report)

Help features (… more in full report)

Design (… more in full report)

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4.1 RANKING TABLE

Rank Bank App(s) Total points

1 ABN AMRO ABN AMRO Alert & Check 9

1 BNP Paribas Mes Comptes 9

1 Citibank Citi Mobile® 9

1 Commonwealth Bank of Australia

CommBank

CommSec Mobile

9

1 Deutsche Bank Meine Bank 9

6 … … 8

6 … … 8

8 … … 7

8 … … 7

8 … … 7

11 … … 6

11 … … 6

11 … … 6

11 … … 6

15 … … 5

15 … … 5

15 … … 5

18 … … 4

18 … … 4

20 … … 3

20 … … 3

22 … … 2

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4.2 STRENGHTS AND WEAKNESSES: BANKING APPS’ OVERALL PERFORMANCE ON THE APPLE WATCH

Looking on the overall performance, the first generation of Apple Watch banking apps show the following performance:

Summary statistics: features offered by the Apple Watch banking apps

(… more in full report)

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5.0 SUMMARY AND OUTLOOK: AN APPLE WATCH ACTION PLAN FOR EVERY BANK

(… more in full report, pages 29 to 31)

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6.0 AUTHORS Carmela Melone, Analyst, specializes in research in the fields of social media for wealth management and mobile apps for financial advisors. Her specific areas of interest are in software benchmarking, channel strategy and online security. Prior to this, she worked at an exchange platform for intellectual property rights, responsible for the digital media marketing strategy. Carmela has a Bachelor’s degree in International Economics and European Studies from the University of Tübingen (Germany).

Emma Haffenden, Senior Analyst, has over 10 years of experience in wealth management and technology, mostly delivering analysis, business and technology strategy consulting and research services to C level Executives of the leading global financial institutions. In her previous roles, she led the Wealth & Private Banking practice at Expand Research, a subsidiary of BCG, and was a Senior Consultant and member of the Wealth Leadership team at Capco in London. Emma has a degree in IT and Criminology, and a Master’s in Database Systems from the University of Westminster.

Steffen Binder, Managing Director and co-founder of MyPrivateBanking Research. Steffen is Head of Research and oversees the research agenda and analyst teams. He is responsible for creating and developing powerful concepts and relevant content to help our clients navigate a rapidly changing digital environment. As a regular speaker at finance and technology industry events around the globe, Steffen is frequently quoted by leading business media such as the Wall Street Journal, Handelsblatt and the Financial Times. Prior to this, Steffen was Managing Director of Forrester Germany, Switzerland and Austria. He came to Forrester through its acquisition of Forit GmbH, a leading European

technology research company, of which he was also a co-founder. Prior to that, Steffen was a partner at Monitor Company (Strategy Consulting). He holds Master’s Degrees in Organizational Behavior from Rutgers University (USA) and in Public Administration from the University of Konstanz (Germany).

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7.0 DISCLAIMER IMPORTANT NOTICE AND DISCLAIMERS:

No Investment Advice

This report is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. This report is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. It does not constitute a general or personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. The price and value of securities referred to in this report will fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of all of the original capital invested in a security discussed in this report may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.

Disclaimers

There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth in this report. MyPrivateBanking GmbH will not be liable to you or anyone else for any loss or injury resulting directly or indirectly from the use of the information contained in this report, caused in whole or in part by its negligence in compiling, interpreting, reporting or delivering the content in this report.

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