‘In the past, before phones and the internet, all communication was face-to-face. Now most of it is digital, via emails and messaging services […] If people were to start using virtual reality it would almost come full circle.’
– Palmer Luckey, Founder of Oculus Rift
Technology is going at a bit of a break-neck pace. When those involved in financial services talk about the closing of traditional players, it’s a cause for concern for financial purists.
Seemingly, the future of financial services lies in the palms of our hands. The recent announcement and incoming rollouts of Apple’s new iPhones (8 and X, meaning 10 rather than an ominous ‘X’), will bring a newfound normality to facial recognition. However, it’s flattering to know that this futuristic technology is already gaining traction amongst financial firms too. Adding a further security layer to an industry that requires safekeeping as far more than a basic necessity, even the scariest of deep technological waters are actually helpful areas to explore.
Plus, when firms such as banks and asset managers run on customer trust, face-to-face interaction needs a revival. As the Virtual Reality-based quotation emphasises before, this personal trust is making a comeback from ”VR”, but exactly how else can financial services companies take advantage of mobile and virtual and augmented reality technologies?
Customer engagement is only heading one way: digital. That’s not a new story, but the evidence is quite worrying. Take banks, for example. Branches have felt the brunt of digital’s victory, as over 1,000 customer facing bank branches have closed in the past 24 months. The Co-operative Bank closed over 50% of its branches between January 2015 and December 2016. Elsewhere, HSBC was reportedly closing four branches a week in the UK, and has shut around 2,100 US and UK branches in the past decade.
Hence, mobile banking is the trend, and what is most noticeable is the increasing methods of creating secure logins: a fundamental for firms that collect and store customer information. HSBC is the globe’s sixth largest bank by assets (of $2.4 trillion), but the news of its closing branches can be balanced out by their clearly innovative foray into digital services. As Fortune notes, HSBC is in fact leveraging the power of the “selfie” phenomenon in order to increase security and convenience in tandem. Instead of the old-style (and completely hackable) password format, facial recognition software – which can be paired to a user’s idiosyncratic passport or license photo – is now available to open accounts.
You can’t argue with that, at least, the 45 million retail customers that have already grasped voice and fingerprint software haven’t. You can’t hack a fingerprint, and even the very greatest vocal mimickers of this world would struggle to break in. Biometrics are the ultimate in data safekeeping and verification. It’s no wonder why financial giants are taking the plunge. Wells Fargo allows eye scans for login, and Bank of America has installed Apple’s Touch ID via smartphones for sign-in ease. Those are just two examples, of course. With the iPhone X due just next week (November 3rd) this technology will become even more of a staple. For those financial institutions which fear privacy issues, Apple has already addressed the problem; ‘representations’ of a person’s face are stored in a secure hardware-based location immune to breaches. The Financial Post also highlighted how third-party apps can use Face ID sign-in, but are alerted to authentication by Apple. All of this shows a robust security process. The facial pay system was even introduced as early as 2015 by none other than Alibaba’s Jack Ma, if only in China, where around 195 million people make payments with their mobile phones.
Mobile technology for financial services doesn’t just end with log-ins either. As we increasingly require instant access to information, mobile technology and data infrastructure developers have obliged by making such channels as wealth management apps low in cost and high in user experience. Younger generations can therefore be more active in interacting with such institutions as asset managers, as they are with bank’s mobile offerings. Deloitte conducted a survey which identified the fact that over half the respondents were unsure about applications offered by fund or investment account providers as opposed to banks; it’s all well and good to have these digital features, but if fund marketers aren’t connecting with their intended audience before a point of sale, they are behind the competition from the get-go.
Even when investment managers offer the ability to, say, send images of documentation for loan processing or transferring funds via mobile (which some do!), around 80% of users do not trade on their handhelds. Many insurance and investment management companies are hoping to take their functional online features to mobile and tablet formats (which is just a start), but you’d be stretched to find many young people aware of the digital presence of asset managers. Hence, even the somewhat basic notion of designing a mobile website to display your funds with maximum user experience is not as simple or widespread as it could – or should – be.
One Kurtosys article outlined a retailer’s guide to maximising an asset manager’s mobile presence. Ideally, auto-populating online forms, a clear brand awareness and respondent search ahead functionality and navigation are the main draws. Once mobile offerings are executed correctly by asset managers, further opportunities will begin. The Deloitte survey highlighted that the immediate strategy for such firms is to raise awareness for their current offering rather than expanding to a more bespoke digital experience, but the next big step is one which will need to be taken extremely quickly to remain relevant in financial services. It’s all going so fast…
The New Reality
If you think augmented reality (AR) is a big joke for financial services, well…
Going back to Apple’s recent investments in new AR technologies: this year ITProPortal underlined the tech monolith’s patent filing for “enhanced face detection using depth information” leading to further use in AR, as well as acquiring a 3D-sensing company based in Tel Aviv, and a mysteriously implicit cybersecurity and facial recognition company. The iPhone 8 and X’s features are essentially mapping out our lives in 3D; worldwide phenomenon Pokémon Go is now bleeding into our actual reality.
What’s more, the trading of Poké Balls has now translated to the practise of making everyday payments using AR in financial services – technology which is already being undertaken by large-scale institutions in evermore inventive ways. For instance, both the Commonwealth Bank of Australia and Halifax (UK) have developed a ‘home finder’ application which takes advantage of real surroundings – in this case, a street – by allowing users to view virtual price data about actual houses when passing them. Even such hit-and-miss products as Google Glass could become more prominent in the retail sector, allowing a shopper to discover products and pricing information in a real world view, or check their account balance at the same as purchasing goods.
Elsewhere, the National Bank of Oman has create a nationwide method whereby users can locate their nearest bank branch or ATM using augmented reality, which in fact goes some way in negating the view of bank branches as defunct. AR and traditional outlets can indeed work together, and Palmer Luckey’s quotation in the introduction here is also corroborated; AR and VR are the perfect tools to assist more personal communications between firms and their customers. Even virtual branches exist. Commerzbank in Germany was the first maverick commercial bank to open one, LiveBank, which allows customers to make secure bank transactions and liaise in real time with virtual advisors which operate around-the-clock. Customer service can’t really get much better (so long as the advice is sound), but even these aforementioned location-based AR tools could extend to the booking of sessions with financial advisors using a mobile on a high street.
This propelling of data visualisation in AR also benefits more financially invested individuals, such as traders or advisors themselves. Newer developments are allowing for the handling of complex data in both 2D and 3D formats. Citibank, as shown in the video above, in association with Microsoft’s HoloLens headset has created Holographic Workstations, allowing for the interactive handling of data right in front of your eyes. VR environments, like those developed by Oculus Rift, can literally map out rendered data from traders to view and manipulate. A Minority Report-style future really does seem like it has infiltrated the present day.
Goldman Sachs predicts that the AR market will be worth $80 billion by 2025; the big technology and financial players will soon run away with all of the capabilities that mobile augmented reality offers. Financial firms still struggling with basic mobile offerings will need to widen their innovative scope fast. It’s an adapt or die scenario, even if virtual worlds don’t seem tangible. The trouble is, they are the new reality.
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