How AR and VR are Disrupting the Banking and Finance Industry?

Overview

Technology has advanced and is impacting many businesses, including the more archaic ones like banking and finance. The sector is undergoing a significant transformation as a result of opening up new opportunities, gaining traction with clients that move quickly, and altering the basis of its primary business operations. Though mostly connected to gaming and entertainment, AR/VR technology has the potential to completely transform the way financial institutions function, engage with their clientele, and provide services.

Virtual and Augmented Reality will reach up to $80 billion market by the end of 2025. (Source: Goldman Sachs Group)

Let’s explore the ways of the impact of AR/VR across the financial sector

Enhancing Customer Services

Like any other industry, the financial market is becoming increasingly competitive. Tech-savvy millennials are the core of banking services, and the core of traditional banking is slowly eroding.

According to the Millennial Disruption Index, 73% of millennials are looking for new online offerings, and 33% say they have no use for a bank in the coming future.

Financial institutions are leveraging AR/VR technologies to create immersive and interactive experiences that make banking services more engaging and accessible.

• Virtual Branches

With Virtual Reality Solutions, banks can create virtual branches where customers can interact with financial advisors from the comfort of their environment. This is beneficial for customers in remote areas or those with mobility issues. Customers can process transactions, explore products and services, and seek financial advice in a virtual world that mimics all the functionalities of a physical branch.

• Personalized Financial Planning

AR can be used to provide personalized financial planning services through dedicated AR apps. Customers can utilize these apps to visualize their financial future by overlaying financial data from their real world. This approach helps customers understand the impact of their financial decisions, investments, and savings plans in a more tangible and intuitive way.

Data Visualization

Finance and trading have grown past the boundaries of spreadsheets and predictive data on 2D screens as they rely heavily on numbers. With the help of AR/VR technologies, analysts can visualize data in a way that consolidates information to form patterns and trends that customers can understand in layman’s terms. They can also utilize the data and advise their customers on making crucial decisions in managing their wealth. Augmented Reality Solutions can also visualize stock market trends, financial reports, and other critical data in an interactive format.

Improving Security

Ensuring the security of data and other assets is critical for any financial institution. AR and VR technologies provide innovative solutions that significantly enhance various security measures and protect vital financial information.

• Biometric Authentication

VR tools can be used to develop advanced biometric authentication methods where users can authenticate their unique identity through facial recognition, iris scans, and other biometric data. This can significantly reduce fraud and identity theft.

• Fraud Detection

AR can aid in real-time fraud detection by overlaying risk indicators onto transaction data. This allows fraud analysts to identify and track suspicious activity and visualize complex networks of dubious transactions, making it easier to prevent fraud from any channel.

Virtual Reality Payments

The payment experience has grown multifold, with contactless virtual cards, digital wallets, virtual pockets, and much more providing seamless and instant checkout experiences. As Debit and Credit cards become simpler and universal payment methods, customers can also gain protection against theft and loss through smarter authentication processes, reducing the need for them to visit banks physically.

Beyond payments, customers can also benefit from instant tracking of transactions, user identification, and instant bank balance checks through AR finance apps. They can also encourage one-click payments by recognizing the price of a product through the customer’s buying intent from the real world.

How to prepare for an AR/VR world in Financial Services?

Develop the Needed Technological Infrastructure

With global digitalization on the horizon, it is imperative for financial companies to constantly manage and develop their digital products through a strong infrastructure to support the change. Larger banks can convert into BaaS (Banking-as-a-Service) platforms where customers can fully utilize the core banking services.

Agile Towards Customer Experience

For a financial company to adapt, tracking and detecting any change in customers’ digital behavior is important. By keeping alert to rising changes in customers’ expectations, financial companies need to be agile and expand their offerings of digital solutions that address their needs instantly.

Comprehensive Training Programs

To successfully implement AR and VR, banks need to train their workforce on how to use these immersive technologies effectively. This includes technical training for IT staff, as well as practical training for customer-facing employees. By encouraging a culture of innovation within the organization, employees can embrace new technologies. Banks can achieve this by promoting continuous learning, rewarding innovative ideas, and fostering a collaborative work environment.

Future Prospects

The possibilities of virtual reality and augmented reality solutions are constantly expanding. Customers may use these immersive technologies in more creative ways because they are more accessible and advanced.

Virtual financial advisors ensure clients have an easy and customized banking experience by being accessible around the clock to offer individualized guidance and support.

Customers can use their smartphones to access a 3D model of a new product or service, replete with interactive features and personalized offers in a virtual world, at a bank’s real-world advertisement through interactive marketing campaigns.

Summing Up

AR and VR are set to disrupt the banking and finance industry by enhancing customer experience, streamlining business operations, and improving security measures. As financial institutions adopt these next-gen technologies, we expect to see a more immersive, efficient, and secure banking environment. The future of banking is not just digital; it’s immersive. Embracing AR and VR today is sure to position banks and financial institutions at the forefront of innovation, ready to meet the demands of tomorrow’s customers.

 

Author:

Sushma Raju

Sushma Raju is the Lead Content Strategist at Novac Immerz, a market leader in enabling business immersive solutions. Sushma has nearly a decade of experience in researching the market, creating the right strategy, and pushing the brand to spotlight with curated content. Sushma also facilitates her team to follow the objective of implementing result-oriented strategies and effectively implementing them across the board.