‘Virtual Reality application in Financial Services and FinTech.’
Isn’t it premature to be talking about it topic? Shouldn’t Financial Services companies focus on digitalization or on predictive analytics applications first? Shouldn’t FinTech companies focus on industry regulation compliance first?
Well, until a few weeks ago, I too thought this conversation was a little premature. But then, this Summer, I saw two different instances where Virtual Reality (VR) was being applied ineffectively by Financial Services and FinTech companies. They seemed to be using VR to indicate they are futuristic, without figuring out how or where to fit it into their offerings.
Ideal cases for VR application
During our conversation, Matthias confirmed that Virtual Reality application is better suited for some scenarios than others. Virtual Reality has a set of specific advantages:
- Scale: Ability to showing off things that are really big or really small
- Flexibility: Ability to change and manipulate objects and your surroundings at a push of a button
- 3D Interaction: Ability to interact and ‘change’ 3D objects or multivariate information/ data
- Telecommunication: Ability to communicate with people as if you were in the same room
- Immersion: Ability to put you inside any experience and making you feel like you’re there
And if VR’s one or more of the above abilities can make a difference in the outcome, only then that scenario/use case is a good candidate for VR application.
Check out the interview video below:
Potential Use cases for Virtual Reality in Financial Services
After my conversation with Matthias, I could see several potential use cases where VR could be applied effectively (‘tangible ROI’) to increase internal productivity and improve client engagement. Here are a few.
Use cases for increasing productivity with Virtual Reality
- VR enabled data visualization for Asset/ Investment management insights: When Machine Learning and AI puts similar information and data in the hands of all asset managers, data visualization using VR might be the ticket to uncovering unique insights.
- Efficient collaboration with VR telecommunication: Financial Service companies are more globally disperse than ever. Smaller FinTech companies also work in distributed teams. Even with apps like Google Docs, Slack and Skype, real time collaboration can be inefficient. VR telecommunication could make collaboration on FinTech product design and launch more efficient.
Use cases for improving client engagement with Virtual Reality
- Client education using immersion: Matthias mentioned (his video) that immersion has proved very effective in fund raising for charities, especially since it allows the person to ‘experience’ the situation.
So, VR can be very powerful when educating Financial Services clients about products and concepts like Socially Responsible Investing, Impact Investing or even their own spend and save decisions.
- Influencing client action with immersion, flexibility and telecommunication: Matthias explained in this segment that gamification elements get accentuated when used with Virtual Reality. Paolo Sironi, in his latest book, talks about using gamification to help investors identify their risk profile. VR immersion with the flexibility feature can further that purpose by helping investors “experience” the outcome of their investment choices in certain market conditions.
This is a much more effective way to use VR in the context of investment advice than showing graphs or the solar system. After all, “experiencing” life with a 25% drop in networth is more impactful than seeing a bar graph with those same networth numbers.
Today, immersion is being used to treat ailments like dementia and paraplegia. VR is being used to get people to “experience” travel destinations in the comfort of their home. What could this mean for their health care costs and saved vacation expense? VR has implications on financial services beyond current financial offerings.
Applying Virtual Reality in Financial Services the right way
The hardware costs of Virtual Reality technology are decreasing by the day. But we may need to wait a little longer to see Financial Services VR apps accessible and affordable on our smart phones.
That said, it makes sense to allocate some resources in 2017 to explore this technology especially for engaging clients in this digital and mobile era. And instead of adding VR feature as a ‘me-too’ contender, it makes sense to think about the situations were these five advantages of VR can be applied and consult experts in this area. I leave you with Matthias’s thoughts on this topic. Happy VR exploring!
Author is the CEO and Founder of S2E Consulting.
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