We all have heard the buzzword “Augmented Reality”, but do you really know how it became so popular? Do you know why it is so well recognized worldwide? And why business giants are all in the race to adopt this technology? Well, in this article we are going to deep dive into this technology and understand the how it is transforming the businesses.
So let’s begin with what Augmented Reality really is
Augmented Reality widely also known as AR is an enhanced version of the real physical world which is achieved by the use of digital visual elements, sound, or other sensory stimuli available via technology. This means that AR is among the apex achievements of technology in today’s time and age. Its growing trend is very beneficial to businesses in all sectors and domains. Yes, the speciality of AR is that it can easily be implemented in all industries, which makes it so desirable. However, the industry that has increasingly impacted by AR is BFSI.
The BFSI industry has been transformed by the introduction of Augmented Reality (AR). AR can be used to provide an immersive experience for customers, giving them the ability to view and interact with their banking products and services in a real-world environment. Today, we will talk about how Augmented Reality has transformed the BFSI industry at large.
Banking and finance sectors are undertaking massive transitions in their operations and in the way they interact with their audience. They are striving to give their customers the best engagement experience possible. One of the major advancements in the BFSI sector is the arrival of Augmented Reality.
We can already see banks like Citi bank wanting to create a virtual trading desk. Citi is planning to add a augmented reality banking interface on top of a trader’s real-world environment, layering in certain tools to actually visualize complex sets of data. This will be very helpful for traders to see, understand, and manipulate large volumes of complex data in real-time in a simplified manner.
In the case of retail banking users, Augmented Reality banking will perform different functions.
For example: A customer looks at something they want to buy. Their finance or banking app can instantly recognize the product and price on their fingertips, and overlay this data on top of the real-world view. This same app could also include options for loans or other marketing propaganda. Customers can then complete payment for the product then and there with minimum clicks on their device. With the payment process authenticated by an integrated biometric system, the goal is to keep all customers regularly engaged with the brand or company.
There are many benefits of augmented reality (AR) in banking. AR can be used to provide an immersive experience for customers when they are using online banking services. Other than good and immersive experience.
Check Out The Benefits of Augmented Banking:
Visualization of Data
This technology may help analysts quickly comprehend complex data flows and reach conclusions.
Virtual Trading
By creating virtual reality trading workstations, some companies are making trading a virtual reality experience. This is achieved by combining asset management software with virtual reality, which gives users improved accessibility to trading algorithms and approaches.
Payments
Some businesses are transforming the payment process into a virtual one. For instance, MasterCard and AR worked together to create a universe where users could make purchases without leaving the virtual setting.
Education in Finance
The banking and financial services business is establishing roots in virtual training to expand on value adds and services.
Obtaining Customers
Banks and other organizations looking to hire members of this age are integrating more technology into their systems, such as augmented reality (AR) and virtual reality (VR).
Now, every new technology brings few challenges with them and hence the respective sectors must be aware about all the challenges and obstacles.
Let’s discuss about the obstacle that banks must overcome while implementing augmented reality.
Energy Consumption
Did you know (that) AR apps require more power to operate than PC software? This means the cost of launching your AR app could triple! Your customers could be unwilling to pay for an overpriced AR experience. Hence thorough budget planning is required to deploy such technology.
Technical Challenges
Banks that are looking to implement a functional augmented reality solutions require various components, which can present a challenge to these legacy financial institutes. In order to implement a successful and functional AR, these technical challenges must be overcome.
Lack of Regulations
As of today, there are no rigorous regulations that determine which companies are allowed to develop what kind of AR applications and for what purposes. This means that AR data can be accessed and used by anyone who can access that data.
Lack of Public Awareness
We know that Augmented Reality (AR) is a trending development, and its use has been integrated with several mobile apps, it's relatively unheard of by the average consumer. In the coming years, these concerns will overcome as more people experience AR daily.
Privacy Issues
The fact that augmented reality relies on the gathering, analysis, and redistribution of many sorts of data, particularly through the use of Big Data, raises questions about security and privacy rights. For instance, some AR tools capture the surroundings in real-time. The act of recording may give rise to legal issues.
AR can also be used to create a more immersive and engaging banking experience, such as through interactive AR games and AR-enhanced financial educational experiences.
Let's see few examples and augmented reality use cases in banking:
Reduced Documentation
Today, banking does require a lot of paperwork. But with the emergence of AR tools, all documentation and details pertaining to a loan can be accessed remotely. This will mean that loan applications can be simpler, sped up, and made more efficient.
Customer Retention & Acquisition
Today’s digital-savvy consumers, especially millennials, demand modern-day banking experiences. But they use different apps and financial institutions at the same time and might switch banks in a heartbeat. Hence, augmented reality for banking will help in customer retention.
Increased Transactional Security
However, by incorporating augmented reality in finance, customers will be able to take their financial transactions to the next level of security with bio-metrics and pattern recognition. This is because the technology allows individuals to verify their identities and conduct financial transactions more securely (e.g. with voice recognition, biological identification, and facial recognition)
Financial Education
Financial education is very important for the people in banking sector. Augmented reality in banking sector has huge potential and can teach people about financial services in faster pace than traditional methods.
Customer Service
Banks like Axis, Kony DBX, Halifax and Australia's Commonwealth Bank have created AR applications to help consumers find nearby branches and ATMs. When in a city, they can scan the area with their phones and see real-time information about location, distance, and services at nearby banks.
Conclusion
The growing need and benefits of AR in the BFSI sector are undebatable. It is a revolution in itself. Banks and financial institutions are successfully utilizing this technology to their fullest. As technology continues to evolve, this type of adjacent realities become more mainstream. Banks and financial institutions will have to keep up in order to attract and retain both customers and employees.The adoption of Augmented Reality in the banking and finance sector has largely helped these institutions step up and give their audience an experience like never before.
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FAQs
Are banks investing in metaverse?
In the past six months, the metaverse has gained market traction across industries, including the banking sector as well. Facebook, which is pouring billions of dollars into the metaverse even changed its name to Meta Platforms in 2021. Needless to say that now some banks are also experimenting with the metaverse.
What is Augmented Reality in Fintech?
AR is a multibillion dollar market and can lead fintech industrialists to the next level than their competitors who are not familiar with it. As it is still in its infancy of development, it will grow and become more advance as time passes. One of the most exciting facets of Augmented Reality is how it enables customers to make correct financial decisions by integrating relevant financial information in their day to day life. There are plenty of other factors making augmented reality (AR) a powerful, new technology composed to transform the future.
How can AR change customer experience?
Emerging technologies such as Augmented Reality (AR) have been a boon. It has been a significant contributor to the future of banking by letting banks to create immersive customer experiences, platforms and applications. This lead to higher user engagement and positive & effective brand communication.
