Technologies such as virtual reality (VR) and augmented reality (AR) tend to be associated with the gaming and entertainment world. They offer deep immersive experiences to engage their users, offering an interaction that most of us could probably have never imagined possible in our lifetimes.
It is probably fair to say that the banking industry is not synonymous with fun. Processes tend to be complicated and boring, founded on numbers and mathematics that put most users off rather than engaging them. However, VR and AR have the potential to bring some enjoyment to a traditionally dull industry.
A quick explanation of VR and AR
Before diving into how they are used in banking, here is a brief overview of what we mean when referring to VR and AR.
VR means experiencing things through digital devices that do not really exist. It is an interactive, 3D computer-created world that can be explored in such a way that it feels like you are actually there on a mental and physical level. Great VR experiences will be believable, interactive, explorable and immersive.
AR is best defined as an interactive experience of a real-world environment. Objects that exist in the real-world are enhanced by computer-generated information. AR essentially combines the virtual and real worlds, creating an immersive experience of the environment around us. AR alters our perception of the real-world whereas VR completely replaces it with a simulated one.
VR and AR in banking
The applications of VR and AR in banking may not be entirely clear at face value given much of the early adoption has been within the gaming and entertainment industry. However, some banks are already deploying the technology and have exhibited the potential that it has to revolutionize financial services. Heather Bellini, the managing director of Goldman Sachs says she expects VR and AR to turnover US $80 billion by 2025.
A report from Google in 2018 predicted that AR technology would spike in 2021 as millions of devices become calibrated with the technology. Banks need to start innovating now if they want to make the most of the likely opportunity.
Engaging and Informing Customers
To create a more immersive experience, banks have turned to VR and AR. The Bank of Oman has used an AR app for almost 5 years that presents customers with the best deals as they walk down the street.
New Zealand based Westpac Bank has used AR to break down the barriers between online and offline experiences. Their app lets customers scan their debit or credit card using the camera from their smartphone. Following that, overlaid on the card will be their current balance and an overview of spending. They can even make payments through the gateway if needed.
Halifax have incorporated immersive technology into their products. The AR app provides property market data, aimed at those who are looking to buy or sell. It can give price advice on listings amongst other details.
Fidelity labs have used the technology that sits behind the Oculus Rift VR to create immersive 3D environments for data analysis. The virtual world allows people to talk to financial advisors in virtual reality and learn about how their stock portfolios are progressing. They use a VR assistant called Cora who uses a virtual office and projector.
At Desjardins Bank, the insurance division has released “Your Way Desjardins.” This is a powerful AR app that uses a fictional character named Penny. The job of Penny is to educate customers through retirement plans, irrespective of their current life stage. This form of AR is specifically designed to enable financial literacy it what might otherwise seem a daunting subject.
BNP Paribas has had a VR app since 2017 which allows its retail bank user to access account activity and transactions within a VR environment. They can even have a guided tour of the steps required to secure the purchase of a home.
Axis Bank is using AR-based navigation to help customers access their ATMs and branches. Customers are able to define their geographical radius and the banking app will display the services that exist nearby.
Most readers will be aware of the proliferation of mobile and digital banks hitting the market. If consumers are heading down that route, it feels like a matter of time before we start seeing virtual branches. If a customer cannot visit a physical branch, a virtual branch may be able to provide the same services but exclusively within the VR environment.
A virtual branch can reduce the cost to the bank whilst providing a great customer experience.
It is almost impossible to talk about banking without mentioning security. Utilizing AR within the customer journey can offer significant security benefits. In 2018, Axis Bank was the first to use biometrics for iris scan identification. A number of banks offer fingerprint a voice recognition solution but using AR in this way takes security to the next level.
A lesser-known use case in banking from recruitment, albeit this could probably apply to all industries. Banks want to recruit top talent and need innovative recruitment processes to do so. ASB has an AR recruitment app to do just that. Candidates can see the General Manager of the bank talking about why it is the perfect role for the candidates, all from the comfort of a smartphone. Whilst it seems like a great idea, very few companies are doing activities like this with AR and it could be an easy way to gain an advantage.
The future of VR And AR in banking
Living in a high-tech world, we know that change is going to be constant and it is vital that age-old industries like banking are able to keep up with the demands of the modern consumer. The cases above already show how some banking institutions have started to adapt successfully and it is only a matter of time before others follow suit.
According to Deltec Bank, Bahamas- “In deploying technologies like VR and AR, banks are able to better attract, engage and retain customers through enriched experiences.” Beyond that, they are seeing reducing operational costs and a better bottom line. Banks that fail to keep up with the competition will lose out to flexible fintechs that can better serve their customers.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.