Virtual reality (VR) could potentially transform every aspect of banking and financial services. From financial education, to customer relations, to trading the markets, to the employee communication and training, virtual reality technology may very well be a game changer. Below we will look at some of the ways that virtual reality will affect banking in the 21st century.
Virtual Reality Banking Branches
Online banking has become the preferred way for most consumers to manage their financial affairs. According to a recent study by Accenture it was found that 86% of millennials preferred to bank online. In fact, every age group except for those 65+ preferred banking online to visiting a branch.
For banks the shift to online banking is good news. Branch visits are more expensive for banks. While more expensive branch visits offer the opportunity to build longer term relationships and to conduct high value transactions such as mortgages and credit card applications.
Overall in person banking increases lifetime customer value for banks. Virtual reality banking could potentially offer the best of both worlds for customers and banks. Using Virtual “avatars” customers and bankers can meet in a virtual reality environment. This will enable customers to receive complex and customized advice without having to arrange time to visit a branch. By being able to centralise their personal banking operations banks will be able to reduce their costs while still offering customer services for their clients.
Lower Training And Meeting Costs
One of the area of banking which is most likely to first benefit from virtual reality are meetings. Virtual reality will be the 21st century equivalent of the conference call. Bank employees will be able to meet with their colleagues the matter where they may be physically located in the world. Using virtual avatars they will be able to interact in a virtual meeting space. Social media giant Facebook views meetings and chat as being one of the biggest opportunities for virtual reality. At the recent Oculus Connect conference they showcased their virtual reality meeting technology.
Virtual Reality Financial Trading
Virtual reality offers the ability ability to present complex amounts of data and makes it easier to interpret and manipulate. This facet of virtual reality is particularly useful for trading the financial markets. Virtual reality trading technology has been developed by Citigroup. The platform, which is still in development, shows how VR visualisation can be used to trade crude futures. You can see a demonstration of how this works.
VR Wealth Management And Financial Planning
One of the problems with encouraging people to save for retirement is that people tend to underestimate their future financial needs. Virtual reality appears to have a solution for this as well. An interactive VR financial planning tool was created which enable young people to see themselves when they were at retirement age. By literally putting themselves in the shoes of the future self they are more predisposed to save for retirement.
Another way that virtual reality is being used for wealth planning is enabling clients to better visualise their investment portfolios. Wealth managers can use virtual reality technology to visualise complex investment portfolios. This technology is being targeted toward high networth younger investors who may not have time to visit with managers in person.
Expanding Into New Financial Markets
Asia is seen as one of the most promising market for virtual reality technology. A recent report by Digi-Capital predicted that from 2020 onwards that the Asian region will drive VR revenues. Expanding into new markets may be made easier by virtual reality. As noted earlier VR technology enables banks to offer personalised services to the current mix of online banking services without having to open physical branches. This can allow them to quickly expand without the high start-up costs associated with fixed branches.