The advent of blockchain and VR/AR is now disrupting industries like education, healthcare, real estate, and, not surprising, finance. While it may have seemed that much-hailed back in the 80’s AR and VR technologies were not destined to evolve into something viable, today their field of application is expanding at an impressive rate. As researchers say, the market for AR/VR solutions will reach $150 billion by 2020, with AR beating VR by dramatic $120 billion.
As regards fintech, the obvious disruption we are facing now is the alleviation of the financial industry’s most evident “pain” — improving customer experience through the transformation of customer services. This transformation is a long-anticipated one and has been brewing in response to market demand: the vast majority of young people aged 25–35 find customer communication style of most banks slow, frustrating and hard to comprehend. Millennials perceive going to a bank as an unpleasant chore, that’s why most of them shun traditional banking. In fact, the Millennial Disruption Index Report states 71% of today’s most active workforce would rather go to a dentist than listen to what banks are saying. In other words, they will not conform to something unappealing and downright boring.
As of today, many banks are already offering AR mobile apps to help users locate the nearest ATM’s in their area. The service also lets users book an appointment straight from the app, without having to use the phone. The use of VR in fintech also offers an opportunity to go to a virtual bank and hold virtualized meetings without having to visit a brick-and-mortar venue. Not only does it ride clients of a frustrating routine of talking to a human advisor, it also helps banks cut real estate and employment costs of setting up affiliate branches. AR solutions help integrate banking with real estate by automatically scanning real estate objects and offering mortgage calculations.
But customer service is not the only branch of fintech that will soon undergo a massive transformation. AR and VR are now reshaping other aspects of financial services, including the following:
Not only millennials but also pretty much anyone with human perception likes their data carefully structured and clearly visualized. AR and VR are invaluable when it comes to data visualization, helping traders analyze ever-increasing amounts of financial information and thus, arrive at more effective and precise financial decisions. Fidelity Labs, for example, uses Oculus Rift to immerse traders in a virtual world called “StockCity” where they can view stock portfolios as craftily and vividly visualized arrays of data.
But not only traders can now benefit from impressive immersion effect of VR: one of my company 8allocate’s clients is a leading European bank that now offers VR banking apps for everyday consumer use, helping transform complex financial information from something purely abstract into clear, almost palpable visual form. We’ve set up a dedicated team for them in our R&D center to build and maintain a robust 3D modeling and VR solution for end users. The fact that we keep receiving similar custom software development requests from banks and financial institutions indicates a very high demand for such outsourced solutions within the industry.
VR application to fintech is now helping customers make informed decisions on their savings, spendings, and investments.
With VR, one can actually purchase items without stepping out into the physical world. VR completely mimics shopping experience and lets you pay for goods you can choose and evaluate in the virtual environment. For example, MasterCard has partnered with Wearality and now lets you buy a shirt within VR golf game “Priceless”. In the future, we will see more companies using the potential of VR and AR to help customers make VR payments.
A wealth of opportunities is now available for traders. Industry innovators view trading as a lucrative niche for VR application to fintech, and are actually developing virtual reality trading workstations using VR and AR data visualization potential and immersion effect. For example, global Citi Bank augments existing banking experience with 2D and 3D elements, while Polish-based tech giant Comarch offers traders a completely virtualized experience.
Tech-savvy financial institutions are now using VR to coach their freshly hired employees and train them to solve customer problems and tackle everyday issues they will deal with on their jobs. Needless to say, VR enhanced employee training also accounts for better customer experience.
The Future Of Fintech
In his Forbes article, Zac Conway, a financial advisor and managing director at Conway Wealth Group, speculates on approaches that financial service providers will have to take to meet the unconventional and ever-changing needs of the millennials. The financial sector will have to adjust — or get swallowed up by IT giants. According to Millennial Disruption Index Report, all 4 of the world’s leading banks are among the ten least popular brands with millennials, and 73% would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank.
Apparently, the world’s leading financial tycoons like CitiBank have already set off on the road to digital transformation and are embracing VR/AR use in fintech. In recent years, we have also witnessed the unprecedented boom of fintech startups. But with 33% of millennials believing they won’t need a bank at all, does the future look equally bright for smaller and less technologically advanced companies?
It takes financial and human resources to develop VR/AR apps for fintech. Most importantly, it takes time, which, with so many odds against them, average market players simply don’t have. “The change will be seismic,” states Millennial Disruption Index Report. Some are already mourning the extinction of an entire industry, with inevitable job losses and adjacent industries losing revenues. Yet, we believe, the situation is far from dramatic.
The market is rapidly changing in line with new needs, and for financial companies who aim to stay in business, the B2B sector already has a solution. The upcoming years will bring the rise of fintech VR outsourcing with IT outsourcing companies refining their skill sets and offering faster and easier ways to introduce VR application to fintech. Those who have never cooperated with an ITO/BPO company should now consider forging the partnership with a reliable fintech VR outsourcing provider. Chances are, this decision could be a lifesaver.