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 build technology to prove concepts. We reflect on where technology is heading and what it means for organizations right now.
In financial services, one of the most pressing issues is financial literacy. Financial literacy helps boost the economy by making employees more productive and making the idea of starting your own business less daunting. It also helps people make informed choices 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 rated as financially literate (the UK ranks 15th out of 29 OECD countries for financial literacy).
Banks have a role to play in developing these life skills for their customers. And technology also has a role.
Some banks are doing really cool things to teach people about money management. There’s a bank in Hungary, my home country, that uses an app to show kids the basics of money management. It doesn’t use real money to do this, but a series of games teach kids the basics of investing, saving, and spending virtual money.
It’s a really useful tool, and not just for kids. Apps like this stop people from being afraid of money and help them understand the things that affect us all, like inflation or higher interest rates. It helps to manage financial risk. Most people learn money by spending the real thing. But technology can help people plan before they spend real money. Some banks are introducing tools to use predictive technology to visualize potential investment returns over a period of time, changing the environment to show, for example, the impact on savings of changing interest rates .
Once you’ve used gamification to teach the basics of finance, you can level up to teach people about investments or savings plans. Visualization helps people see the state of their money much better than a spreadsheet or linear bank statement.
A mobile app is a great approach to providing such services these days, but if you want to take it a step further, you can introduce virtual reality or augmented reality to help customers plan different scenarios. It’s easier to see large documents and graphs in a virtual environment where you can browse different options, compare returns on different types of investments, or see live predictions based on variable data inputs. You can do this with a real person from the bank explaining these options to you, but without the infrastructure cost of using a bank branch.
From a bank’s perspective, you could make loan decisions faster if you helped people visualize, side-by-side, different options on a mortgage or loan, for example.
Of course, people don’t make serious investment decisions based solely on AI or a visualization tool. If you’re about to buy a house, you’ll probably want to talk to a real person. But technology could be a first step, giving you the information you need to talk to an advisor. It helps with research. Personally, I like talking to a chatbot or an AI to get some basic information before talking to a decision maker.
There are also other interesting applications for virtual reality and augmented reality. A classic feature that banks are starting to use is location visualization so you can see, for example, which gas station nearby has an ATM.
Or by logging into a virtual banking portal, but instead of opening a new page to transfer money, you can open multiple windows in the AR/VR environment, see all your balances in one place, and swipe and deposit money between accounts.
It’s about improving the user experience. And everything tells us that the user experience is evolving towards VR and AR. Currently, most people have smart TVs, but tomorrow most people will also have AR/VR glasses at home.
Technology is improving and becoming more accessible every day, and banks are starting to prepare for it. The only limiting factor is the imagination.