The Potential of Augmented Reality
Unlike the simulated world of virtual reality (VR), augmented reality (AR) combines a view of actual, real-world surroundings with information supplied by a computer. More than an overlay of data, AR augments and enriches a perception of the world. AR provokes the senses in a way that lets users interact with or manipulate the information the computer provides about what they see.
Since its early development more than 20 years ago, AR has moved from gaming consoles to practical applications on phones, mobile devices, and smart glasses. Although the introduction of AR to finance has happened slowly, the trend will accelerate as wired millennials expect to manage their financial lives without frequent visits to brick-and-mortar establishments. The transition from traditional financial management to Fintech is inevitable.
Potential Uses of Augmented Reality
Banks and other financial institutions have released some basic mobile apps that employ AR concepts. These apps allow customers to locate ATMs, nearby branches and personalized account information. Other businesses have developed apps that allow potential homebuyers to visualize real estate trends and data while glancing at homes in a particular neighborhood. Soon, smart glasses should have the ability to access a growing array of personal account information through a variety of biometric authentication options beyond retinal scans.
Here are four potential ways that AR will transform Fintech:
- Expanded Banking Options: Beyond online banking, virtual branches may soon become available that will reduce the need for an extensive network of physical branches. With visualization of account information available from the comfort of home, personalized bankers can offer online face-to-face meetings without either party sitting in a bank branch. As they discuss financial matters, data can be shared in illustrative ways to demonstrate how one investment strategy differs from another. A reduction in branches reduces overhead costs.
- Investment Account Management: Similar to virtualized bank branches, financial advisors can share extensive information about accounts, historical stock prices and other data that allow an investor to make decisions about the purchase and sale of stocks, bonds, and other commodities without pouring through books, annual or quarterly reports, SEC filings or other information. Having these tools available allows clients to envision different scenarios before making a wealth management decision with their advisor or broker.
- Promoting Financial Awareness: Training and education for both employees and customers will improve as AR integrates into financial education programs. Customers at home — whether they are retirees or millennials — benefit from interactive exercises that allow them to make decisions in a virtualized classroom to evaluate costs and benefits before they conduct real-world transactions in-person or online.
- Account Payments and Management: Many people have established online accounts to pay credit card and utility bills without writing a check or licking a stamp. As businesses roll out apps allowing online purchases that may occur with a wink of the eye into a pair of smart glasses, banks and credit card companies need to invest in the electronic infrastructure, security software, and customer support to assure that these transactions occur without error or delay.
Concerns and Considerations
Banks and other financial institutions must prepare for customers who expect AR and VR financial experiences. Security, individual and societal concerns regarding privacy, as well as concerns about how working across multiple interfaces may allow others to capture consumer data, are important considerations. The finance industry must move forward, respond to the needs of emerging consumers and manage data in a secure manner in order for AR to succeed.