Augmented Reality in the Banking Sector

Soniya Khanna

06 Jul, 2023

Augmented reality is set to change how we interact with brands and their services. With its adoption in the banking sector, augmented realities promise never seen before the change in banking.

What is Augmented Reality (AR)?

 AR is an experience where parts of users’ physical world are enhanced with computer-generated input. It can provide an interactive experience of a virtual environment in the real world.

 AR can make illusions look real, and users can do things as he or she would do in the real world. AR has the capability of altering the current perception of the real world.

What is the need for Augmented Reality in banks?

Augmented realities allow users to cover digital information on top of the real-world environment. AR technology is partially immersive experience boosted by heads up display or existing smartphones. Banks and financial institutions can engage customers and create new immersive experiences through millions of existing compatible smartphones. AR can help financial service institutions to engage existing and new potential banking customers.

The need for AR in the banking sector can be deduced by the fact that it will provide consumers to view the information in a concise, engaging as well as in an immersive manner. The banks have found this challenging, and AR can help them in tackling this challenge.

Banks have also faced challenges with respect to enabling greater consumer choice and in providing greater visibility in terms of spending patterns and behaviors. It is another area where banks have encountered issues, but it is also an area where AR can have a profound impact as it will allow consumers to make informed decisions in terms of spending. It will provide customers with a new way of interpreting banking data and information.

What are the opportunities with Augmented Reality in banking?

Here in this segment, we bring to you ways of using augmented realities in banking:

• Locating ATMs

AR phone applications have been made, which helps customers to locate ATMs nearby and bank branches. In India, the Axis bank launched an AR app called “Near me” for this purpose. These apps convey real-time data about location, distance, and services provided at these ATMs.

• Self-service

Today customers prefer banking from the comfort of their homes rather than visiting brick and mortar bank branches. Banking apps are also gaining popularity as they make transactions more easy and straight forward. Now, if we take into consideration the role of augmented reality in banking applications, it will help customers with information about their bank accounts, loans, mortgages, etc. This will provide a great user experience to customers. 

• Payment experience

The AR finance apps can encourage payments by recognizing the specifications and price of an item and overlaying the data on customers’ experience with the real world. Accounts payment and management may also get simpler with this.

• Customer Acquisition

Millennials are a generation that has relied on technology and need systems that evolve with them. The technologies are expected to grow because many institutions in different fields have started adopting augmented realities. Customer acquisition will depend on whether banks have the ability to adopt new trends and innovation in banking.

• Security

The introduction of AR into banking can improve security with biometric security, like voice recognition and retinal scans. It will be helping in blocking unauthorized access by hackers.

• Bank branches

Virtual banking is becoming more usual than before, and it has reduced the number of people visiting bank branches. These virtual banks combine self-service with competent AR assistants like chatbots etc. that provide essential information to customers. With AR, visualization of account information is possible, which in turn will help banks to offer personalized bank assistance. Data can also be presented in a unique manner, which will help customers to understand various investment strategies. 

• Minimal Documentation

Imagine filing those bulk of physical documents one after the other. This can be brought down as AR develops. Bank statements, advice, letters, and even cheques can be presented virtually. It will save a lot of time. It will also simplify the process of obtaining loans, which involves a lot of paperwork. 

Challenges with the implementation of Augmented Reality in banking

There are certain challenges facing banks in the implementation of augmented realities. Some of these challenges are discussed below:

• Technical challenges

When it comes to banks that are looking to implement a functional augmented reality solution, they may require a lot of components. It may pose a challenge to banks, and unless these technical debilitations are tackled, AR cannot be properly visualized.   

• Lack of regulations

As of now, there are no such regulations that help businesses and consumers understand what kind of AR applications may be used and how data can be processed. Therefore the data may be used with malicious intent.

• Lack of public awareness

Although AR is a hot topic of discussion for tech geeks, consumers or the public are unaware of the technology. Lack of awareness among the public may lead to privacy and security concerns while using AR technology.

How can customers benefit from Augmented Reality (AR) in banking?

The customers can benefit from AR in the following ways:

• It creates a personal experience

With AR, customers can have a unique and personalized experience when they avail of the services of banks because the possibilities of customization are endless with AR.

• It’s new and exciting

Customers are looking for convenience and differentiation, and it is where AR comes in. Its uniqueness makes it exciting for customers.

• It’s engaging

One of the main aspects of AR is how engaging it can be. This aspect is widely appreciated by users around the world. It creates a great user experience, which causes them to come back for more.

The future of banking with augmented reality

The future of the banking sector looks stable with the introduction of emerging technologies that have eased the entire digital banking experience. The days where you required standing in a long queue are now a thing of the past. More and more banks are leveraging online and digital channels with a view to reach the next generation of customers.

AR is leading the way in this pursuit. It is the future of banking technology as it easily adapts with the needs of financial technology, and for this, combining research and analysis of consumer data with advanced technology is the lifeline to keep traditional banks alive and relevant in this digital marketplace.

Conclusion

Read our article:Growing Amount of Challenger Banks in India