10 Use Cases of How AR is Changing the Way Consumers Interact with Banking and Financial Services

Augmented reality (AR) is an emerging technology that creates immersive experiences by combining the real world with virtual elements. During its initial stages, this technology was primarily utilized in the entertainment and healthcare industries to create personalized experiences through virtual tours or medical simulations.

Over the years, we have seen a rapid adoption of AR in banking and financial services. In fact, according to a recent Grand View Research report, the global AR market is expected to witness a rapid surge and reach a valuation of $597.54 billion by 2030, amounting to a CAGR of 39.8% by the end of 2030!

As more and more fintech companies are reaping the benefits of AR VR in financial services to create more interactive and engaging customer experiences, the future of this technology looks promising. From enhanced data visualisation to interactive payment solutions, AR in financial services carries a lot of benefits and potential.

In this article, we will take you on a detailed tour highlighting the top use cases for augmented reality in finance, its benefits, and a few associated implementation challenges.

Top 10 Augmented Reality Use Cases in Banking

Before we go into the details of the benefits of AR in finance, let’s first understand how it can be utilized by businesses to streamline their operations through actual use cases for augmented reality in finance.

Use Case #1: Data Visualization

It’s a given fact that the banking and finance domain is heavily reliant on data. One of the most common obstacles faced in this aspect is viewing data from multiple sources on traditional screens. Even a minute misinterpretation or error can cost millions of dollars for organizations. However, with the rapid adoption of AR in banking, this is no longer the case.

By utilizing AR in finance services, institutions can now view data on virtual screens and in 3D. It also enhances efficiency in trading through collaborative 3D data analysis and empowers businesses with a better understanding of the spending patterns of their consumers through AR visualization of credit card changes.

Example:

Westpac Banking Corporation in Australia is one of the fantastic examples of augmented reality use cases in banking that offers its users financial data visualization and budgeting with the help of smartphone-based AR. Customers simply have to slide their credit or debit cards under their phone, activating the camera. Following this, the balance, transaction history, and other relevant information are presented in 3D bar charts.

Use Case #2: Virtual Trading

Another key application of AR in financial services is virtual trading. The integration of augmented reality with asset management software enables users to interact with trading algorithms and methods, helping them make more informed investment decisions.

Furthermore, by creating VR workstations for trading, financial institutions enable individuals to work on desktops or smartphones and interact with virtual agents for financial advice.

[Also Read: Stock Trading App Development: The Whys and Hows]

Example:

Citi Group, a well-known financial services enterprise, currently utilizes AR integrated into Microsoft Hololens to provide its customers with holographic workstations. This has enabled its financial clients to visualize complex data in a simplified manner. This easily emerges as one of the exceptional use cases for augmented reality in finance.

Use Case #3: Improved Insurance Claims

According to industry experts, by the end of 2025, major auto claims and non-injury claims will be conducted virtually.

The utilization of AR technology in finance. especially when it comes to processing insurance claims, carries immense potential. It serves as an essential guide for users by highlighting damaged property, providing accurate estimates of repair costs, and even connecting individuals with approved contractors.

[Also Read: Insurance Mobile App Development: Everything You Need to Know]

Example:

Allianz’s AR insurance claim filing app is one of the most notable examples of the role of AR in finance. It allows policyholders to capture images and videos of damaged property simply through their smartphones, thereby leading to streamlined operations and improved communication. If a picture can speak a thousand words, just imagine what the power of video can do for the claims process.

Use Case #4: Financial Education, Planning and Investment

With the help of AR-based apps, users can get a much better understanding of their spending habits and financial goals. All they need to do is simply point their phone at their budget, and they can see their spending habits segmented into different categories, visualized in real time.

In addition, AR technology in banking facilitates investment decisions. Customers are provided with real-time information about stocks, bonds, and mutual funds. The information is displayed in an interactive and absorbable manner so that individuals can make better, informed decisions related to their finances.

Example:

Your Way Desjardins – an integrated AR platform by Desjardins Bank, offers a virtual assistant named Penny. With the help of interactive videos and storytelling, this assistant plays a key role in educating customers. Furthermore, Penny carefully assesses the unique requirements and portfolios of each customer and provides them with valuable recommendations for saving plans.

Use Case #5: Enhanced Customer Service

Customer service is an important component of every business in the finance industry. The impact of AR in this aspect has been profound. Many financial institutions are now providing AR applications to their customers, with the help of which they can locate the nearest bank or ATMs.

A simple scan of the outdoor environment with your smartphone will provide you with detailed and real-time information about the closest bank location, services, distance, and all relevant data.

[Also Read: How to create an AI-powered customer service platform like Zendesk?]

Example:

One of the core augmented reality use cases in banking is the one exhibited by the Ukrainian PrivatBank. Notably, PrivatBank is currently using AR to understand how customers’ information can easily be integrated with this technology, enabling them to conduct all banking processes virtually. This means greater control over your finances, better security through multifactor authentication, and enhanced convenience.

Use Case #6: Data Privacy and Security

Did you know in 2023 alone, 72.7% of all organizations fell prey to a ransomware attack? With the increasing number of cyberattacks and data breaches across all domains, including finance, the need for enhanced security measures cannot be overstated. This is where the importance of AR in banking shines.

By utilizing AR and VR services in banking, institutions can improve their security systems in a plethora of ways. These include implementing authentication methods such as facial recognition, biometric authentication, and voice recognition, among others.

Furthermore, the importance of AR in banking can also be viewed in risk management. For example, VR simulation can help understand the effectiveness of existing cybersecurity systems and detect any potential risk.

Example:

Axis Bank, a leading financial institution in India, leveraged the potential of augmented reality to finance with iris scan for Aadhaar-based transactions. Customers simply have to scan their iris on a tablet, thereby making the entire Aadhaar authentication process hassle-free. This has especially proved to be extremely useful for consumers in rural parts of the country who want to access digital banking.

Use Case #7: Online Payments

By integrating AR technology in banking, traditional payment service providers can now enhance the efficiency and timeliness of order processing. This has especially been more prominent after the COVID-19 pandemic when outdoor movement was restricted, and virtual payments came in handy.

Example:

Visa Europe, a leading digital payment company, joined hands with the AR-based app Blippar to enable customers to make payments by simply pointing their smartphones toward the products. This, in turn, enhanced the customer shopping experience by creating a seamless and convenient payment method.

Use Case #8: Virtual Product Demos for Financial Products

When properly harnessed, AR and VR services in banking can be used to showcase financial products, such as credit cards, mortgages, or even insurance plans, interactively. For example, with the help of AR-powered apps, users can easily navigate through the benefits, reward programs, or eligibility criteria in a more engaging format.

Example:

Mastercard recently launched a new AR app that enables its users to see, explore, and access the benefits of its products. It delivers a photo-realistic AR experience that transports users to a 360-degree virtual environment, where crucial interactive portals bring their card benefits to life.

Use Case #9: Simulating Customer Interactions

Virtual and augmented reality are changing the way financial organizations interact with their customers. By offering a powerful simulation of how the actual experience would be, institutions are now able to enhance customer service training for their employees and interns. This includes finding empathetic solutions for their customers, early detection of unconscious biases, and better understanding of consumers to offer personalized advice.

Example:

The TD Bank Group collaborated with Remio, a VR platform, to launch an immersive learning tool that can elevate workplace performance. By using virtual reality headsets, TD personnel were able to simulate everyday customer interactions and learned how to tackle them in a meaningful way.

Use Case #10: Interactive Portfolio Management

Augmented reality in finance can be used to visualize diverse aspects of a user’s financial data – from running a comparison across investment portfolios to analyzing asset allocation and risk profiles for evaluating potential returns.  It allows for a more intuitive understanding of the investment portfolio and facilitates better decision-making and easier adjustments.

Example:

Fidelity Investments recently launched StockCity, a tool that combines virtual reality and visualization to display the customer’s stock profile as a vertically sprawling metropolis. It boasts numerous exciting features, such as architectural changes based on fluctuations in Wall Street, building heights determined by stock prices, and even traffic overload representing stocks undergoing unusually high trading volume.

[Also Read: How to Develop an Investment App Successfully for Your Business?]

Benefits of Leveraging Augmented Reality in Financial Services

The impact of AR in banking is becoming increasingly visible as more and more enterprises are utilizing augmented reality in financial services. On that note, below we have highlighted the key benefits of AR in banking.

Enhancing the User Experience

One of the main benefits of AR in banking is that it enhances the user experience by providing a visually engaging and interactive interface. From visualizing complex financial data in a simplified manner to promoting financial literacy, augmented reality in banking and finance empowers individuals to make better-informed financial decisions.

Risk Management Enhancement

Augmented Reality can significantly enhance risk management in banking by enabling more accurate risk assessment through visualization of market data and trends in real time. This can lead to more informed decision-making and proactive risk avoidance strategies.

Improves Operational Efficiency

Another key impact of AR in banking lies in its ability to facilitate operational efficiency within financial institutions. For example, with the help of AR-powered smart glasses, finance professionals can now perform even the most complex tasks easily and efficiently. These include customer onboarding, fraud detection, and more. AR helps streamline processes by overlaying all relevant information in their field of view, thereby reducing the chances of error and saving time and resources.

Customer Engagement and Personalization

AR technology in financial services can boost customer engagement by offering personalized financial advice and product recommendations through interactive AR interfaces. This personalized approach can greatly improve customer satisfaction and loyalty.

Staying Ahead of Competition

It’s a given fact that the finance market is extremely competitive. In fact, major Fortune 500 companies are already using competitive intelligence to gain the upper hand over their fellow competitors. The role of AR in this aspect is profound, as it helps enterprises stay relevant and ahead of the competition by fostering innovation and differentiation.

Businesses are able to create unique and memorable experiences for their audience, which not only attracts new customers but also leads to increased consumer loyalty and retention.

Challenges and Considerations of Implementing AR in Financial Services

While the benefits of AR in banking are diverse, businesses also face a few obstacles during the implementation process. Let’s take a look at some examples of such challenges.

Ensuring Data Security and Privacy

Since AR in finance primarily relies heavily on real-time financial data, it often gets difficult for enterprises to ensure that their customer information is well-protected and secured. Failure to achieve this can not only lead to a breach of customer confidentiality and trust, but also significantly hamper the reputation of the institution.

Therefore, when leveraging AR VR in financial services, it is extremely important for businesses to invest in robust cybersecurity measures and guarantee compliance with all data protection regulations. 

Partnering with a dedicated banking software development company with similar expertise in the field and profound knowledge of the related compliance requirements is the best approach that can safeguard your business. This will not only help you ensure compliance with stringent regulations but will also pave the way for you to build trust and secure client data effectively.

Huge Cost of Implementation

Building AR infrastructure and developing AR applications usually require a significant upfront investment for businesses, both in terms of money and energy. It can often exceed several hundreds and thousands of dollars, which can be challenging for small- to medium-sized companies operating in this domain.

To tackle this challenge, a careful assessment of the return on investment and a clear business case is extremely important before implementing AR in finance.

Lack of Proper Regulations

The regulatory landscape for AR applications and data processing is still evolving, offering businesses and consumers a unique opportunity to shape the future. While this creates some challenges, it also allows for innovation and flexibility in adopting new technologies. Additionally, the lack of such regulations increases the chance of using sensitive data with malicious intent.

The Future of AR Applications in Banking Industry

The future of AR in financial services looks promising, to say the least, carrying immense potential to transform the ways banks and financial institutions operate.

According to Gartner, ‘The technical aspects of AR and VR will merge into a mixed reality feature set, with AR maintaining a larger market share due to its business applications. This new technology, called mixed reality, will merge the real and the virtual worlds to create hyperpersonal experiences.’

In fact, currently, we can notice quite a few trends in the use of AR and VR services in banking. One such includes the integration of augmented reality with artificial intelligence (AI), which can enable personal financial advice and predictive analytics. Customers will be able to receive real-time recommendations, depending on their risk tolerance, financial goals, and current market trends.

Additionally, there has also been a surge in the adoption of wearable AR devices, such as smart glasses. With the help of these, users can easily receive financial information on the go, make transactions through gesture-based interfaces, and get access to real-time financial notifications in their field of view.

Considering the evolving tech advancements, AR in finance future appears to be taking a stronghold with better technologies and even better implementations!

How Appinventiv Drives Digital Innovation with Its Custom FinTech Software Services

Leveraging the process of AR and VR, the FinTech and banking industry is undoubtedly going through a rapid transformation. From simplification of complex financial data and enhanced customer engagement to driving financial literacy and operational efficiency, the benefits of AR in banking and finance are limitless.

However, that being said, the implementation process does come alongside its own unique set of challenges that we have discussed above. The key is to address these challenges proactively and invest in AR initiatives to stay ahead of the competition and deliver superior customer experiences.

As a fintech software development company, Appinventiv is dedicated to providing the most resilient and high-performing custom fintech solutions. These include mobile banking software development, accounting management software development, wealth management software development, and more. Our portfolio in the fintech sector has led to multiple projects like EdFundo, Mudra and more that have raised millions in funding and have also revolutionized financial interactions for our clients. These success stories reflect our expertise in crafting solutions that drive significant market impact.

Our team of experts leverages cutting-edge technology to craft fintech solutions tailored to enhance operational efficiencies, improve customer service, and ensure robust data security. Being a dedicated AR/VR development company, we understand the intricacies of regulatory compliance and prioritize this in our development process. This ensures that all our solutions not only boost the technological capabilities of financial institutions but also adhere strictly to industry standards and regulations.

Contact us today to start your journey with AR in financial services and redefine what’s possible in your industry.

FAQs

Q. What is AR in banking?

A. Augmented reality in banking and financial services allows businesses to enhance customer experience by delivering a personalized and interactive way of accessing complex financial information and services. Some examples of AR in banking include AR-powered banking applications, virtual bank branches, scannable brochures, virtual product demos, and more.

Q. How augmented reality and virtual reality are reshaping financial services?

A. Simplified data visualization, improved insurance claims, and enhanced data privacy and security are some of the most prominent augmented reality in banking examples that are reshaping financial services. With the help of this advanced technology, users are now able to access an entirely new level of digital banking services that facilitate collaboration, innovation, and financial literacy.

Q. How can we successfully integrate augmented reality into financial services?

A. Implementation of AR in financial services, although carrying tremendous potential, requires careful planning and execution. Here are a few tips that you must carefully consider during this process.

• Implement end-to-end encryption for data transmission.
• Make sure that the AR interface is user-friendly and easy to navigate.
• Conduct thorough tests to ensure that the AR application delivers consistent performance across multiple devices.
• Gather user feedback and carefully analyze it to address any required additional challenges.
• Research all the relevant legal regulations thoroughly and ensure optimal compliance.

THE AUTHOR

Amardeep Rawat

ASSOCIATE VICE PRESIDENT