In view of the rapid development of analytics based on artificial intelligence, the increase in the importance of technological innovations and the decrease in the importance of stationary branches in distribution channels, digitally generated new forms of reality have become an extremely popular and current topic in the financial services sector. According to IDC Research, revenues from the implementation of virtual reality techniques are expected to exceed at least $ 162 billion by 2020.
Virtual Reality, as well as Augmented Reality and Mixed Reality constitute solutions characteristic for the next phase of Internet development – WEB 3.0. Innovative ICT solutions are based on the integration of various types of sensors communicating automatically in real time, various data sets (Big Data) and analytical tools in the field of artificial intelligence. All these solutions create a new type of digital ecosystem with a universal, intelligent and intuitive interface based on multimedia internet connectivity, i.e. Internet of Things (IoT). In an ecosystem defined in this way, until recently very sharp boundaries between the physical and virtual world have been blurred.
Virtual Reality (VR) means creating a completely digital environment in which users’ multimedia experiences are the result of the superimposition of computer-generated images, sounds, movements, etc. Users are fully immersed in an unreal world, but have a partial influence on the events around them as an active participant in the event scenario. A characteristic feature of virtual reality is the full elimination of limitations in the real world (e.g. the ability to fly independently, have above-average strength, etc.). In the case of VR, the real world is completely replaced by a computer-generated digital world, which has its own rules and is limited only by the imagination of its creators.
Augmented Reality (AR) is an enhanced version of the physical world by adding an additional virtual dimension using digital information technology. As a result of superimposing information generated by digital devices (such as a smartphone or special glasses), the AR participant obtains an image of the physical world, but enriched in real time with an immaterial dimension. In practice, it is possible to experience both physically existing objects and completely virtual elements with the senses, which, however, are presented within a coherent, fully integrated reality.
Hybrid Reality (MR) is a technology that aims to perfectly combine virtual reality (VR, i.e. completely digital worlds) and augmented reality (AR, i.e. applying additional visual elements to the real world). On the one hand, the user is in a completely virtual world, and on the other hand, he has to take into account the limitations of the real world.
Through virtual, augmented or hybrid reality tools, financial institutions will be able to offer clients a more effective service model, in which the advantages of remote relations and interaction with an employee in a branch are combined. Currently used videoconferencing is the most popular option to connect remotely with clients similar to face-to-face meetings. On the one hand, they ensure efficiency in reaching the customer, and on the other hand, they eliminate the need to incur large expenses and time expenses for travel by customer service representatives or in communication between the headquarters and branches.
However, despite real-time direct interactions using image and sound, the details of the financial services in question are difficult to present in videoconferencing. Considering the limitations of presentation via a webcam, clients find it difficult to present particularly complex issues (e.g. when presenting elements of paper documentation to an employee). These obstacles are due to technical limitations, i.e. poor image resolution, small image cross-section and the stability of the Internet connection that remains much to be desired. The solution to problems with videoconferences is to be brought by digital reality, including the use of holograms. As technology evolves, a headset or projection headset can display visual holograms in any physical space, such as a home, office, or any customer space.
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In virtual reality, it will be possible to operate a branch of a financial institution or it will be possible to provide full service by an avatar of an employee of such institution with the possibility of providing service analogous to a physical meeting. Contract signing, credit management processes or financial advisory services can be represented in the near future with digital visualizations and simulations based on individualized relationships using virtual reality technology tailored to the specific needs of the client.
The use of virtual reality in financial institutions is effective in terms of customer acquisition costs as well as optimizing employee engagement. A fully functional and personalized service in the virtual world will be provided regardless of where both parties are. The considerable savings resulting from the reduction of the currently high costs of creating and maintaining a network of stationary distribution channels will be of great importance.
Nevertheless, both VR and AR are at a very early stage of commercialization in the financial services sector. Their implementation is still burdened with a high strategic risk due to, inter alia, difficult to estimate the rate of return on investment in innovative technologies. However, in general, financial services are characterized by a high degree of abstraction, so through VR institutions will be able to present a visualization of financial benefits for their clients. Then the client will be able to realize the benefits of the relationship with the financial institution through virtual access to the account and multimedia viewing of the effects and potential opportunities related to demand activity.
For example, BNP Paribank has introduced a VR application that allows retail banking customers to virtual, three-dimensional tours of apartments or financial houses from mortgage loans offered by the bank. On the other hand, Wells Fargo is implementing a prototype VR implementation project for customer service through the possibility of establishing a fully virtual, but personalized relationship with customers. An example of such a solution is the activation of clients in the relationship with the bank through virtual contests and competition. One of such activities is the virtual transfer of customers in the form of avatars to the nineteenth-century California in the gold rush
The development of digital technologies, data analysis, advanced predictive analytics and the increase in computing power combined with changing consumer preferences will soon create a new framework for competition in the financial sector, this time in the virtual world.