Can Augmented Reality make daily banking a more pleasant experience?

With the increased competition in the financial services landscape(between banks/insurers, but also of new entrants like FinTechs and Telcos), customers are demanding and expecting a more innovative and fluent digital user experience.

Unfortunately, most banks and insurers, with their product-oriented online and mobile platforms, are not known for their pleasant and fluent user experience. The trend towards customer oriented services, like personal financial management (with functions like budget management, expense categorization, saving goals…​) and robo-advise, is already a big step in the right direction, but even then, managing financials is still considered to be a boring intangible and complex task for most people.

Virtual (VR) and augmented reality (AR) could bring a solution. These technologies provide a user experience which is more intuitive, personalised and pleasant, as they introduce an element of gamification to the experience. Both VR and AR are however quite bloated terms, so some contextualization is in order.

VR is an interactive computer-generated experience, in which the user is immersed as much as possible. This means that VR requires a lot of equipment (like virtual reality glasses), throwing a large barrier for customers to cross. Special PR activities and events set aside, this technology is therefore not expected to change the financial services sector any time soon.

Nonetheless some banks are experimenting with the technology and try to create value out of VR, for example:

• Citi has been testing the Microsoft HoloLens as a virtual workstation for their traders. The aim is that traders can detect quicker market patterns and are able to quickly drill down through the enormous amounts of available market information, ultimately leading to better trading decisions.

• Fidelity Investments wants to help investors manage their finances, by visualising their investment portfolio as a virtual city where each equity position is a building with the height and footprint representing the price, trading volume and outstanding equity shares.

• Commonwealth Bank of Australia has setup a virtual reality application for Google Cardboard Goggles to boost the recruitment of technical talent.

These applications are however very niche and mainly PR stunts. The use case of Citi is probably the most promising, as VR is particularly useful to present large amounts of (real-time) data in such a way that people can quickly analyse it and take effective action on it.
Currently this is handled by increasing the size of monitors or increasing the number of monitors, but research shows that people have difficulties to cope with this information overload. A VR environment allows to have an almost endless monitor surrounding the user, bringing a better user experience, but also providing cost savings over the multimonitor towers.

The biggest issue of VR is however the special equipment, resulting in the user

• Having to acquire and install this (often expensive) equipment
• To stay stationary the whole time
• To be disconnected from the outside environment (locked in a virtual world), meaning user cannot absorb information from the outside (e.g. interaction with colleagues).

AR on the other-hand is an interactive computer-generated experience, where the real-world world scene (captured by a camera) is "augmented" (overlaid) by computer-generated elements (virtual objects). The big difference with VR is the degree of immersion, which is much lower with AR than with VR. Furthermore, AR requires less specialized equipment (technology is supported by most smartphones today), is more intuitive and doesn’t require the user to stay stationary. This makes AR much more accessible to the masses and therefore a more viable candidate for banks/insurers to experiment with. The huge success of the Pokémon game (with at its peak more than 100 million people hunting Pokémons in the streets), showed that the world is ready for this technology.

Recent years the most innovative banks are showing off with new examples of AR:

• Millennium bank provides an innovative way to advertise products to their customers:

• National Bank of Oman, Turkish Akbank, Axis and Royal Bank of Canada all provide an AR-based app to
  • Locate the nearest branch or ATM: customers can see real-time information on the location and distance of an ATM or branch and make directly an appointment for a branch.
  • Receive offers and deals: customers receive personalised offers and deals from his bank, when he walks into a mall or shop.

• First Gulf Bank (UAE) offers a virtual bank branch to their customers using AR technology
• Westpac New Zealand* will release a banking app for account management using AR. Customers will be able to check credit and debit card balances, see recent transactions, visualize spend locations…​ To activate the functionality, users only have to keep their debit/credit card in front of the camera and automatically all related information is showed (without login and without having to go to the desired screens).

• Halifax Savings, Axis and Commonwealth Bank of Australia all provide an AR-based app for buying houses: customers see the nearby houses for sale that have been pre-approved (for a mortgage) by the bank. The customer points his app to the property and gets all listing details (including pictures of the interior) and other information (like a simulation of the mortgage), which can be useful to make a decision to buy the property. Furthermore, your smartphone pushes notifications to you when you are physically close to an available property that meets your objectives.

The use case of real-estate could also be extended to other use cases, like initiating a car loan by pointing to a car, initiating a student loan by pointing to a campus…​

Many of those innovations are nonetheless still limited in their added value to the customer and remain merely an entertainment or PR stunt to improve the company’s branding as an innovative company. For example, customers can find faster an ATM or branch with a simple 2D Google Search.

Overall AR brings its highest added value in 2 types of use cases:

• Use cases where huge amounts of data need to be processed real-time. E.g. as for the above VR examples for traders, AR could provide a solution which combines the best of both worlds, i.e. an unlimited screen, but still allowing the necessary interactions with colleagues on the trading floor.
• Use cases where data has a geographical value with a physical interaction

In the next years, this will evolve however to new services providing real added value to the customers and internal employees, e.g.

• Education: educate complex financial content via animated, game-like content
• Recruitment via virtual job interview simulators
• Improve efficiency of homeworking via an improved interaction with colleagues
• Next Best Action: instead of only providing financial Next Best Actions, banks could become part of the day to day schedule and propose any daily activity next best action, using AR as a means to interact
• Real-life object search: user can hold their phone up to an item of interest (e.g. friend’s outfit), after which the application automatically recognizes the item, searches where it can be bought and then facilitates the (acquisition) transaction
• Virtual branch: a personal banker who can visit you digitally in your living room to offer financial advice. This provides a more engaging experience that a phone call or even video call, without the need to physically see the personal banker.
• Immersive data visualization:
  • Visualize your own personal money vault (allow to visualize your assets at bank as cash)
  • Visualize the effects of certain financial decisions, i.e. show customers what life would be like in various future financial positions
  • Benchmark your financial health against peers in a very immersive way
• Advertisement: advertisement of banks (on public places or in branches) could be used as markers to trigger augmented content (like videos, tools and other info related to the advertisement), i.e. similar to the current QR code scanning, but then with a better user experience
• Insurance claiming: using AR customers could make movies/take pictures of the damage (e.g. car incident, fire, theft…​) and enrich directly the pictures/movies with additional info (like the value of stolen/damaged objects, driving conditions…​). This would allow insurers to reconstruct the incident in 3D, allowing a better claim processing.

In order to achieve the highest added value, new approaches to UX design are however required. In AR and VR, applications can be built in three dimensions (3D), which requires a completely new design approach, e.g. important data should appear closer to the user, graphs and statistics can now show multiple axes, allowing to rotate the data and gain new insights…​

Overall the technology of AR is still immature, but the rapid increase of the smartphone processing power and the large investments being made in this domain, will quickly make this technology common to the masses. If banks don’t want to miss out on the opportunities of this technology, they should start experimenting with it today and already build up the necessary knowledge both in product management, UX design as in technical implementation.