Why Citi Was the First Bank on the Apple Watch

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Of the smartwatch apps teased during this week's Apple Watch reveal, only one came from a bank: Citigroup.

This marks the first time the global bank has developed an app for a device that's not already in market, and is the boldest example of the bank's recent aggressive work to fast-track its rollout of digital products. The bank said it wanted to see how quickly it could build an app when Apple announced the smartwatch prototypes in September. The timing spelled opportunity.

"We were trying to transform how we work," said Heather Cox, Citi's chief client-experience, digital and marketing officer for global consumer banking.

Apple announced its developer toolkit, called WatchKit, on November 18, which gave Citi and other developers the tools needed to create their smartwatch apps. The app's planned public debut took Citi 120 days to create. It would have probably taken at least twice as long before the bank deployed its more aggressive development stance, said Cox.

But Citi, like so many others, will likely have to wait until April to get its hands on the actual device.

The app, which is called Citi Mobile Lite, includes something the bank's current smartphone app lacks: transaction alerts that show color-coded visuals of how close users are to their credit limits. This is part of a trend in which personal financial management (PFM) services are making a comeback on mobile, and what some believe will become even more personal, wearable devices.

Cox says millennials want and expect tools that show them how they are spending in order to become wise about what they are doing.

Citi's app also lets customers see their account balances and recent transactions. They will receive real-time alerts any time they make a payment.

Citi's news comes on the heels of Moven announcing a smartwatch app that includes a spending meter that turns red, green or yellow depending on the wearer's financial profile. The app runs on Motorola Moto360 and Samsung Galaxy Gear watches.

Westpac New Zealand has offered smartwatch apps with balance lookups for some time, and may incorporate Moven's spending meter in a future version. Tangerine in Canada has been piloting initiatives with Samsung Gear and Android Wear that provide real-time alerts, voice commands, account balances and funds transfers on devices.

PayPal has also aggressively rolled out apps for popular smartwatch lines, and is one of the few financial companies with an app for the older, less expensive Pebble watches.

But beyond these examples, banks with smartwatch apps are a rarity. Many institutions, however, are curious about the technology — especially when it's created by the likes of Apple. Tangerine and Bank of the West expressed interest to American Banker in designing experiences for the Apple Watch back in September.

Cox, for one, says creating experiences for wearables is the start of a broader attempt to deliver more relevant information to consumers — without making them ask for it. Smartwatches could make reading data-related alerts quicker and easier than a smartphone that's tucked away in a purse or a pocket.

The Apple Watch app is the latest step toward Citi's digital goal: having a role in customers' daily lives as a means to develop relationships and long-term engagement.

Wearable devices are ripe for receiving real-time alerts, said Stessa Cohen, research director at Gartner Consulting.

Cohen envisions a banking experience where consumers could decide when they receive alerts.

"I turn off alerts because I don't want to hear the ding, ding, ding all the time," Cohen said.

She gives kudos to Citi for already having something developed.

Sure, Apple Watch could fail just as the first version of Google Glass did for consumers. Not to mention the smartwatch costs at least $349 and needs to be paired with an iPhone. But embracing the change in technology is worth the risk, even for banks, in what Cohen calls "digital surfing."

"You've got to get up on the board and make some mistakes," said Cohen.

Plus, a company could use these emerging digital platforms to reach a new, desirable audience.

Being one of the first out of the gates with an app helps brands connect with a smaller group of first adopters who tend to be young and have higher incomes, said Mary Monahan, executive vice president and research director of mobile at Javelin Strategy & Research.

"You hit this beautiful segment of consumers," Monahan said.

Cox says Citi is agnostic to device operating systems but wants to be where its customers prefer to connect with the bank. The global bank also launched a contest in September to attract ideas from developers for wearable devices and Internet of Things more broadly.

Its Apple Watch app was largely inspired by Citi Mobile Snapshot, and the bank said it would like to add in some ideas uncovered from the challenge.

Citi expects to learn a lot from the ways its customers use the Apple Watch app.

"There are still a lot of question marks around banking and wearables," Cox said. "I'm quite bullish on the wearables market."

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