As the world moves further and further into the era of digitalization, it has become increasingly evident that, in order to sustain success, it is an absolute must for businesses to find new and innovative ways to move forward in accompaniment with advancing technologies. Those that fail to progress are typically found left in the dust of those that do.
The realm of finance is no different from the rest of the world. Advancements in technology, and the ability to effectively implement that technology, are required in order to keep businesses afloat. Companies that lack this ability tend to fall behind in terms of revenue, customers, and external business connections. In fact, in a study carried out by Deloitte, a professional services firm heavily invested in the advancement of technology use, it was found that 30% of financial service firms viewed as “frontrunners” were more advanced in implementing AI in their services. Along with this, Deloitte found that 45% of those frontrunners invest 5 million dollars per year into AI, and 25% invest up to 10 million dollars.
Virtual reality exploded onto the scene nearly over a decade ago and has since made a name for itself in the business world. The surface of its potential has since only been scratched and is predicted to aid in a supply of services previously inconceivable. As banks, firms, unions, and all other financial institutions move towards enforcing VR in their practices, means to knock down barriers in the field of finance are becoming limitless.
Problems in Modern Finance
Big Data Visualization
According to a study from EMC, a data storage enterprise, nearly 44 zettabytes, 44 trillion gigabytes, of digital data will exist by the end of 2022. Over a fifth of that data, as shown in the graph below, is utilized by the financial industry, so it may come as no surprise that one of the major problems facing financial institutions today is the rather slow process of assessing this never-ending flow of data. This sprouts from the fact that much of the big data in finance is abstract; the data is processed through computers and stored, seldom viewed or analyzed by humans, which leaves sort of a gap between valuable information and our understanding of it.
Solution
Finding a single way to govern an infinite amount of input has proven to be a difficult task, but with the implementation of virtual reality, visualization of pre-processed data becomes much easier. With information already initialized through the use of high-tech computers, big data can be broken down into subdivisions of information, such as customer spending habits, transaction and revenue logs, media data, and stock values. Once this process is completed, humans are able to effortlessly visualize this information through the use of VR and apply it to business protocol and decision-making.
One great example of this implementation is the Ticker Tube VR program by QuantVR. The program was created with the idea of making the analysis of stock prices more clear and accessible for everyday investors. The average investor is limited to viewing only a few stocks at a time on a mobile phone or laptop. With Ticker Tube, users are placed into a ‘VR environment which features between 300 and 400 stocks and their live feeds.’ In this VR environment, users can run a closer inspection of specific stock values without losing place of the other stocks around them, enabling investors and shareholders to view stock values and data in a more convenient and efficient manner.
Personalized Finances
Retaining customers has proved to be a struggle, especially for financial institutions, as clients are always looking for the best deal from companies that are willing to give them one-on-one attention. According to a 2019 Accenture Global Financial Services Consumer Study, every 1 in 2 customers wants personalized banking advice based on personal circumstances and 64% want insurance premiums tied to their personal behavior. Consumers are more willing than ever to share their personal data to attain top tier services. With this, corporations are now capable of maintaining remote, yet personal, relationships with their clientele through the use of VR.
Solution
There are a couple applications of VR in this subfield, mainly in the banking industry. First, with VR, customers are able to gain instant access to their bank's database using a digital interface containing the data; a more advanced example can be seen below. Obviously, these customers will have a limited amount of information presented to them, mainly pertaining to their own personal accounts, transactions, and finances, but they will have an up-close, digitized view of their requests, offers, stock portfolios, and really any commerce under their bank. Hence, customers would be able to have their own insight without assistance. In the event customers do require assistance, however, there is also a solution also through the use of VR.
Customers can use virtual meeting rooms to receive exclusive advice and analysis based on their personal financial habits, all from the comfort of their own homes. Clients and bankers would still be able to view each other as if they were meeting in person, perhaps with an avatar of sorts, and would be enabled to review the digital information in a more accessible way, allowing financial advisors to maintain a more personal relationship with their clients and increase the probability of retaining customers for their respective banks.
Security Improvement
Security breaches have developed as one of the most prolific issues in the financial industry, notably over the past decade or so. According to the Federal Trade Commission, upwards of 2.8 million customers reported fraudulent transactions in 2021, resulting in a loss of more than 5.8 billion dollars. It was found that imposter scams accounted for more than 2.3 billion dollars in losses, followed by online shopping scams, which accounted for 392 million dollars in losses. As technology becomes more and more accessible, it has become increasingly likely for bank accounts to be hacked and card information to be stolen.
Not only are the security breaches themselves a problem, but the recovery time has also proved to be an issue. As found in an IBM study, in 2021, it took an average of 212 days to identify a breach and an average 75 days to contain a breach, for a total lifecycle of 287 days. Nearly an entire year is required for businesses to recover from these data breaches, depending on the size and severity of the breach. It was also found that the average cost of a breach lasting 200+ days was nearly 5 million dollars.
Solution
As the digital revolution marches on, banks and other financial institutions are expected to adapt and find new ways to protect their customers' information and capital. By implementing VR logins for digital banking services, organizations can take their financial security to an entirely new level. Virtual reality login procedures would allow customers to access their personal accounts through the use of biometric authentication, a process that “relies on the unique biological characteristics of an individual” to verify that person’s identity. These characteristics include face and voice recognition, iris detection, and in some cases fingerprint scans. Customers could also use these mechanisms to verify any transactions that take place under their name, making it safer to shop and spend online.
VR procedures would make it extremely difficult for hackers to reproduce these unique characteristics, effectively shutting down a considerable amount of scams and hacks. These login procedures go hand-in-hand with the aforementioned virtual database, as customers would be enabled to log in safely and gain access to a digital interface of their personal accounts.
Conclusion
Possibilities in VR application in the financial industry are endless, ranging from virtual and interactive stock rooms to simulated meeting rooms. Virtual reality can play a large role in assisting big time stock market gurus, business aficionados, and even the everyday modern banking customer. While incorporating these new techniques into the workflow may be a bit complicated and take an extended period, now is the time for banks, firms, and other businesses to begin implementing VR procedures on an everyday basis. Doing so would ensure their spot among some of the top competitors against their competition.
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