Extended Reality offers financial services huge opportunities

23 September 2020 Consultancy.uk

The use of Extended Reality has the potential to disrupt the financial services industry, according to a new report by Synechron. The study suggests it has the potential of becoming a technology used on daily basis just like televisions and smartphones.

Extended Reality (XR) is a term coined to encompass all possible computer graphics and wearable generated realities. The umbrella term describes all reality technologies, such as Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR).

There are differences between the three. In VR, for example, people are immersed into a fully artificial environment or imagined environment by cutting the user off from the physical world; while in AR virtual objects are super-imposed on a real-world environment. Mixed Reality meanwhile serves as an expansion on AR, utilising spatial computing which allows a person to place a digitally created item, such as an image of a couch, into their living room to visualize how it would look.

While Extended Reality was initially talked about in an entertainment function – with games like Beatsaber, Angry Birds AR and Pokémon Go showcasing the application of XR technologies – there have also been use cases for XR in education, and beyond. The manufacturing, healthcare and retail sectors are just some of the industrial environments in which the immersive technologies are being used for training and education.

Forecast size of the AR and VR market worldwide in 2020 and 20254

Enter financial services

The next frontier which XR could make a big impact in is financial services. Over the last decade several industry participants have been experimenting with the potential of XR to simulate scenarios, and ‘war game’ potential plans or problems they might face. This includes optimised trading.

Synechron’s Rajul Mittal stated, “Citibank and Microsoft partnered to build a Holographic trading station using the HoloLens 1 to help traders visualise real-time financial data and records for increased trading efficiency and greater insights from past data. Similarly, in mobile banking, Westpac Bank introduced an AR phone-based application allowing customers to scan their debit or credit cards to reveal a visualised balance sheet, including their last two week’s spending by category. It also allowed them to complete their payments due.”

As more and more people look to move beyond the use of physical branches to address their financial needs, GTE Financial also released an AI-powered environment, allowing clients to interact with the bank’s virtual ‘personnel.’ As banks look to scale back their spending on physical locations, and consumers look to reduce their public activities amid the continuing pandemic, such a way of viewing products and services and learn about fraud protection could prove increasingly popular among banks.

Payment and purchase services for customers are also increasingly centring on XR in the financial sector. The Commonwealth Bank’s property app stores data about residential properties, before allowing customers to scan a property and gain real-time information such as the asking price, while calculating the mortgage interest and monthly repayments. Elsewhere, Mastercard has experimented with both VR and AR, in particular introducing an AR application focused on educating customers on the benefits of their credit cards. After scanning their cards, users will be able to interact with various features of their cards.

Acceleration

According to Synechron, the time for experimentation is fast coming to the end, and banks will need to prepare an XR offering in the near future to keep pace with their competitors. Author Alexander Huitema stated that rapidly advancing technology means XR experiences will soon become a standard part of life.

Huitema explained, “The introduction of 5G is the most important component for XR to be widely adopted because of the potential for data transfers up to a speed of 3 gigabits per second… The ultimate implications of 5G is that users will be able to see rendered images in real-time and reduce delivery time for VR and AR designers… Once 5G is available and becomes the new benchmark, the result will be more seamless VR, AR and MR experiences.”

In the future then, financial institutions will increasingly utilise these technologies to create immersive customer experiences centred on mortgages, loans and investments, either from their homes or on the move. Meanwhile, traders and private bankers will be able to attain information at a faster rate and will be able to better interact with the data presented.


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