Augmented Reality (AR) technology is currently having a seismic impact across multiple industry sectors. From oil and gas, construction and healthcare, to retail and manufacturing, AR technologies are now being deployed to bring about wide-ranging commercial benefits, from enhanced process efficiency and cost reduction to the creation of entirely new revenue streams. For CEO’s and business owners considering the impact of AR, there are a multitude of factors to consider before kick-starting an AR initiative. In 2018 blue-chip brands such as IKEA and Zara are already deploying new AR initiatives that fundamentally change their business operations, sales processes and the way in which consumers engage with their software offering. Within the banking and financial services sector, many companies are trying to establish how AR fits into the software mix and how the technology can be used to underpin wider commercial goals and objectives. Today we’re exploring how augmented reality is impacting banking and financial services.
Why Augmented Reality matters for banks
AR technology enables users to overlay digital information and 3D models on top of the real-world environment. Unlike it’s relative counterpart, Virtual Reality (VR), which provides a fully immersive user experience, AR technology is a partially immersive experience driven by a heads up display (HUD) or existing smartphones and tablets. In 2017 Apple and Google both rolled out their respective AR development platforms, ARKit and ARCore. For banks and financial services companies interested in exploring the capabilities of AR, this move from Apple and Google could be a game changer. With the advent and ongoing evolution of Apple ARKit and Google ARCore, banks and financial institutions can now engage consumers and create new immersive experiences via hundreds of millions of existing compatible smartphones and tablets. It’s estimated that by the end of 2018, banks and financial services companies will have access to over one billion existing iOS and Android compatible mobile devices. All of a sudden, AR has found a hero device (mobile) and financial services institutions have a channel by which to engage existing and new potential banking customers.
AR provides consumers to view information in a concise, engaging and immersive way – an area where banks face major challenges. One of the major challenges for banks is enabling greater consumer choice and providing greater visibility of spending patterns and behaviours. This is one particular area where AR could have an impact in terms of enabling consumers to make more informed decisions in relation to spending, by having a new way in which to interpret banking data and information. As an example, AR can be used to display graphs and charts that clearly illustrate the performance of a customers savings account and make recommendations on how to optimise spending patterns.
Banks can use Augmented Reality as a competitive differentiator
Now that Apple and Google are doubling down on AR, it’s time for big businesses and brands to sit-up and take notice. In the same way that mobile technology transformed the consumer banking landscape in the past decade, AR has the potential to demonstrate an equally transformative impact in the next five to ten years. In the past decade, consumers have switched to mobile banking applications in their droves, and for millennials and generation z, mobile represents the first port of call for all banking related tasks and interactions. Banks and financial services companies are now trying to establish how to engage with a new generation of customers who will never use a physical retail branch to perform banking tasks. As such, the use of mobile technology as a means of consumer engagement, has become a critical consideration for banks struggling to engage a new generation of customers whereby mobile is the only real option as a means of interaction. As Apple and Google start to increase the breadth and depth of functionality within their own AR platforms via existing smartphones and tablets, banks will have a unique opportunity to provide new applications and means of interaction and engagement. Failure to step-up and take advantage of these opportunities now could cause some banks to fall behind the curve, as innovators and early adopters strive to deploy AR as a unique competitive differentiator.
In a recent interview, Apple CEO Tim Cook discussed how AR will alter our lives, and why he thinks the world is becoming a better as a consequence of AR specific innovations. Mr Cook described the advent of ARKit as being a game changer for consumers and businesses alike, suggesting that AR possesses the ability to be as transformative and ubiquitous as the launch of the first iPhone ten years ago. As Apple continue to bake AR related features and functionality, at both hardware and software level, into new iPhones and iPads, consumers will increasingly start to adopt the technology. Ads consumers become more comfortable using AR applications via the camera view, banks will need to carefully consider how to leverage the untapped value in the smartphones camera to deliver new (and existing) products and services in a more immersive and meaningful way. AR is already hitting the headlines in retail; and having a transformative impact on the way prospective customers progress through the buying cycle. As this transformative shift rapidly occurs, banks and financial services companies will need to act fast or risk falling behind.
PSD2, Open Banking & Augmented Reality
The banking and financial services landscape has never been more competitive, which is great news for consumers. When it comes to developing AR experiences for banking customers, large banking institutions will need to act fast or risk disruption via challenger banks. Challenger banks are characterised by their ability to harness the power and potential of mobile to provide new and immersive experiences for banking customers. They’re also smaller, more agile and possess the ability to move fast, which is a serious threat to established players in the banking sector. The key threat to existing banks is the emergence of a challenger organisation, who can exploit the capabilities of AR to deliver transformative mobile experiences to consumers. These AR driven products and services could be used to explain complex financial services and products in a clear and concise way, enabling consumers to save precious time and money.
Open banking, also referred to as PSD2 (payment services directive), came into force in January 2018 and represents a complete game changer for banks and financial services institutions. PSD2 is effectively forcing big banks to open up their data and to provide banking consumers with increased choice in terms of the way financial products and services are delivered. The onset of open banking represents a competitive threat to the large, incumbent banking institutions as new challengers such as Monzo and Starling Bank shift to ‘mobile-only’ consumer offerings. This transformative shift towards mobile will have profound ramifications for banks, and as AR starts to become an increasingly important aspect of the mobile landscape, banks will need to quickly figure out how to integrate emerging technologies into their existing suite of products and services, or risk being heavily disrupted by smaller, more agile challengers.
As AR continues to disrupt the retail sector, banks will need to start thinking about how the technology can be integrated into their current offerings. Imagine an AR focused banking application that enables consumers to view additional information on a particular product using the smartphones camera. These AR banking applications could be used to overlay additional digital information on top of the physical product and could compare the market to find the most competitive price by comparing against competing retailers. The application could be used to compare product specifications and price and to overlay this information on top of the ‘real-world’ view. The application could then access the consumers financial data and serve up offers that relate to financing options and loans.
If your business is banking or financial services, there has never been a better time to start exploring the capabilities of AR and the ramifications it may have in terms of how the technology will impact your business operations and how you deliver software products and services to your customers. The smart move is for banks to start thinking about the journeys and interactions that matter most to consumers and to craft AR use cases that underpin these experiences. As emerging technologies become more mature, especially via existing mobile devices, banks and financial services companies have an unparalleled opportunity to present consumer data in a richer and more meaningful way. This process involves thinking about how back-office consumer data can seamlessly integrate with existing management processes, to provide front-end experiences via mobile AR. The key is to leverage the vast quantity of consumer data that is currently available in tandem with existing applications and systems to create highly immersive and engaging consumer experiences using AR. As always, the core consideration is to start with the end in mind and define what commercial success looks like. Once you have your commercial goals and objectives in place, understanding how to leverage the capabilities of AR to underpin large volumes of existing consumer data becomes a small conceptual leap. If you’re interested in exploring the capabilities of AR for banking and financial services, contact Mozenix today to kick-start the conversation.