The Virtual Reality of Financial Services

The Virtual Reality of Financial Services
August 6, 2018 Krisztian Toth
virtual reality financial services

In the near future, we will not be looking into magic balls but in freaky-looking glasses to see other dimensions of reality. It will also be more than rollercoasters and monster fights – banks and insurers are getting ready to open their virtual shops’ doors.

virtual reality financial services

 

Pushing consumers first

Consumer-oriented trade shows like CES always play a huge role in introducing or pushing new technologies, no matter how strange they may seem at first. The most recent giant show, CES Asia, was held at the end of June and didn’t fail to paint a colorful picture of futuristic consumer technology.

Putting aside pure entertainment and cutting-edge weirdness, the robots tended to show up everywhere and in such forms that promote their mainstream use. In a world depicted by the event, consumers would be surrounded by flying cars, live in a fully connected smart home that is served by automation, be it VEDAs or IoT.

So far they are just the buzzwords we know so well. What’s more interesting is that vendors have been relentlessly pushing virtual reality and augmented reality (VR and AR) solutions and have even indicated that these could be deployed by business earlier than consumers – a phenomenon that would be unique on its own.

 

Professional skepticism aside

VR and AR are mostly known as the technologies that require freaky-looking glasses and a lot of patience on the user side. So how come they can make business sense already?

For one, those glasses are not in the way of work as much as they would in everyday activities. Seeing models what they would look in real life gives engineers an advantage they would trade for comfort. Remote workers of all kinds can benefit from sharing the glass screens with their colleagues.

These advantages can also be translated into serious savings in operational costs: according to Forbes’ report, as much as 40% can be achieved using VR-technology in certain industries. While we don’t have an exact figure for the financial industry at hand, the number of announcements and reports that tackle the topic indicates banks and insurers have also had some early success digging the gold of the new reality.

 

What VR and AR Have in Stock for the Financial Services Industry?

The insurance industry is one of the early adopters of technology, mainly in simulations and training. Car crashes, breakdowns, or even the onboarding of staff can be great opportunities to use VR. According to a fresh report by KMPG, the adoption rates are expected to increase significantly as the awareness spreads and the technology becomes more sophisticated.

More interestingly, though, VR and AR presents a different kind of opportunity as well for the insurers: namely developing new products that assess the risks of the mass use of these technologies (accidents, security risks, privacy abuse, etc.) KPMG estimates the losses to be covered can reach USD 20bn.

Other financial service providers, such as banks and credit institutions, are sitting on valuable data reserves that require analysis, preferably one that is quick to make and easy to interpret. CitiBank has been experimenting with a holographic workstation for upgrading its trading services, while Wells Fargo is onto creating a virtual space, a branch substitute if you like, where clients and agents can interact, and Comarch of Poland also helps its clients in communicating in an augmented environment.  

French banking giant BNP Paribas has also announced the rollout of a VR-based app and a set of new services for its retail customers last year. It allows the clients to manage their accounts in a different way or make decisions easier but it also allows the bank to create a new type of operation.

Payment processing is another field where banks and payment services companies are motivated to introduce the new technology. Worldpay has virtual terminals for smaller and AirPIN for bigger purchases, both representing a new generation of payments that customers demand and will ultimately engage with. Payscout, on the other hand, has a virtual environment where clients are able to buy physical goods with Visa Checkout and also has a virtual space for donations.

The most talk in the financial services industry is about whether virtual spaces can substitute bank branches in the long term. With the appearance of digital-only banks and mobile banking, the question is timely and the saving potential is enormous. Financial institutions are looking for feasible solutions for sure, yet they are cautious not to turn customer sentiment into negative. By all means, consumer awareness of AR/VR and its engagement capabilities (banking in a nice, easy-to-use virtual environment versus a crappy branch not so nearby) is something to trust.  

 

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