One of the things I love about my research is talking to organizations about how technology will change the way they do things in the future, and then working with my team to create proof-of-concept technology. We think about the direction technology is going, and what that means for organizations right now.
Financial literacy is one of the most pressing issues in the financial services industry. Financial literacy helps boost the economy by making employees more productive and making it less daunting to think about starting your own business. It also helps people make informed decisions in their daily lives when it comes to saving, investing, borrowing, spending and managing their income.
According to the CBI, 67% of adults in the UK are assessed as financially literate (the UK ranks 15th out of 29 countries in the Organization for Economic Co-operation and Development).
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Banks play a role in developing these life skills for their clients. Technology plays a role, too.
Some banks do really interesting things to teach people about money management. There’s a bank in Hungary, my home country, that uses an app to teach kids the basics of money management. It does not use real money to do this, but rather a series of games that teach children the basics of investing, saving and spending virtual money.
It’s a really useful tool, and it’s not just for kids. Apps like this stop people from being afraid of money, and help them understand things that affect us all, like inflation or rising interest rates. Helps to overcome financial risks. Most people learn about money by spending the real thing. But technology can help people plan before they spend real money. Some banks offer tools to use predictive technology to visualize potential returns on investments over a period of time, changing the environment to show, for example, the effect of changing interest rates on savings.
Once you use motivation to teach the basics of finance, you can step up to teaching people about investments or savings plans. Visualization helps people see the state of their finances much better than a spreadsheet or linear bank statement.
A mobile application is a great way to provide such services nowadays, but if you want to take it one step further, you can introduce virtual reality or augmented reality to help customers plan different scenarios. It’s easier to see large documents and charts in a virtual environment where you can scroll through different options, compare returns from different investment types, or see live forecasts based on variable data inputs. You can do this with a real person from the bank talking to you through these options, but without the infrastructure cost of using a bank branch.
From a bank’s perspective, you can make faster lending decisions if you help people visualize, side by side, different options on a mortgage or loan, for example.
Of course, people don’t make serious investment decisions based on artificial intelligence or a visualization tool alone. If you’re about to buy a home, you’ll probably want to talk to a real person. But technology may be the first step, to give you the information you need to speak with a counselor. Helps with the search. Personally, I like to talk to a chatbot or AI to get basic information before talking to a decision maker.
There are other interesting applications for VR and AR as well. Banks are starting to use the classic features of visualizing locations so you can see, for example, which nearby petrol station has an ATM.
Or log into a virtual bank portal but instead of opening a new page to transfer money, you can open multiple windows in an AR/VR environment, see all your balances in one place, and drag and drop money between accounts.
This is all about improving the user experience. And everything tells us that the user experience is moving towards virtual reality and augmented reality. Right now, most people own a smart TV, but tomorrow, most people will have AR/VR glasses at home, too.
Technology is getting better and more accessible every day, and banks are starting to plan for it. The only limiting factor is imagination.