Virtual reality: the ultimate engagement strategy

Engagement and retention is undoubtedly at the top of the list of priorities for financial institutions, particularly those looking to adopt a broad range of technological innovations, such as artificial intelligence (AI) and virtual reality (VR). Improving client-side security and digital touchpoints are critical for continued innovation in the FinTech industry, as customers can be mistrustful in extremely novel technology in relation to their finances. However, the potential for new technological opportunities is huge, so finding the right way to incorporate testing these within the industry is key to enhancing the digital banking experience.

At the 2017 Finovate Europe Summit, organisations across the banking and finance industry presented and shared ideas with demos of their latest innovative digital banking solutions. Here is what we were up to:

Finovate summary

Sharing ideas is vital for moving banking further into the digital sphere and this year, over 70 companies presented their innovations. Aman Narain, Head of Digital at Schroders, said that “Finovate felt like stepping into the future of finance, with genuinely innovative companies challenging conventional wisdom.”

Crealogix presented this year as well at Finovate and our Head of Sales Marc and myself stood on stage and talked about millennials, VR and where the two meet. Engaging the millennial generation is no mean feat for banks: their expectations are high, as so is their willingness to switch constantly, in search of a better solution. Losing just one customer is a huge blow for any bank, so potentially losing a whole generation would be catastrophic. And that is where VR and the bank’s efforts to stay relevant come in. Engaging in new technology and finding new ways of serving customers keeps the bank interesting, while VR revolutionises the mundane digital banking experience, transforming it into a personal and immersive touchpoint with the bank.

Our demo revealed how logging into VR to view our customer’s personal financial world and visualising how money is flowing can help them see the full effects of their financial decisions and engage with their banks in a relevant and effective way. We presented our sample customer with an investment opportunity matching her financial capacities and her personal interest in green energy and enabled her to predict how a future financial target would affect her situation going forward. Check out the image below of me with my VR goggles on, marvelling at the investment proposal as I virtually stand in a forest of green energy.

An action shot of the Crealogix presentation!

Putting the fun in banking

While it is convenient to assume that VR is for the age where all cars are electric and and energy is sourced exclusively from the sun, I encourage you to think about the wallet, phone book, calendar, cards and heavy keychain you carried around in your pocket a little over 10 years ago, to be replaced by a single device today. Technology is changing at an incredible pace and people are much faster on the uptake than banks. Increasing competition from FinTech start-ups, many of which showcased their incredible work at Finovate, means that banks are fighting to remain relevant and necessary. However, many banks such as ABN AMRO are offering a digital platform, application programming interface (API), to sidestep this competition by partnering with FinTechs, while at the same time engaging customers. API helps banks assume a new role as a platform and shift towards open banking, a trend which Brits in particular are gearing towards.

For many banks, missing a step in the digital uptake means losing out on future wealth as the younger generations so demanding of technology grow in the active workforce. Dubai bank Emirates NBD goes a step beyond apps and websites. In minutes, customers are registered and their money simply categorised into what they own, and what they could potentially own. This reverses the traditional process. Instead of the customer fitting their financial needs around the bank’s established services or pre-defining application processes, this fully digital bank lets the customer decide how their money is delivered, and how it will be paid back using channels which suit them, rather than the bank. This is just the sort of innovative solution we saw in abundance at Finovate this year, indicating exciting times ahead for the banking revolution.

Improving communication

Emotions are important and from this aspect, banking is no different from anything else. Only one-third of customers’ decisions are based on rational thinking, with feelings and emotions being the key deciding factors. The tools banks can utilise to boost engagement through more emotive techniques include communication via social media, live chats and VR. The company-to-customer interaction taking place through these channels is more meaningful and, with engaged customers buying 90% more frequently and spending 60% more per transaction, banks would take a huge risk not employing these techniques.

According to research conducted by the Analysis Group, $14.6 billion in revenue is forecast to come from VR-based technology by 2020. With a figure like that, it would not be too long until the first movers will appear on the banking market to reap benefits. The key to delivering a VR solution to your customers will be finding the right use cases where it can be transformative for the digital banking habits. VR is more than simply clicking through a website, sitting on a roller coaster or jumping out of an airplane in a 360° video. It immerses the customer in their own, personal environment where all the external factors like bank and product becomes blocks of the world rather than the full institution.

And let’s not forget Social VR which brings customer-company relationships to a new level, creating a feeling of trust that would go a long way in the banking industry. Integrating social VR into a marketing campaign could help banks create a memorable, engaging experience for customers and, ultimately, drive acquisition, growth and sales.

Cutting costs

We have discussed the benefits of VR (and seen it in person at Finovate!), however, we must not forget that it will not replace traditional digital or mobile banking, it just adds to the digital presence. Combining VR with artificial intelligence (AI) could turn digital banking on its head, enhancing the operation efficiency of traditional banks, as well as reducing costs. AI is not a new concept, but there are distinct risks when used in isolation, which could be overcome by incorporating VR. Firstly, AI complements the human aspect of customer interactions, while lowering customer service costs and improving response times. Knowing what customers need before they turn to bots for support can remove the middle ground of dissatisfaction. Companies like Assist.ai and Digital Genius combine AI with the human element of customer service to optimise the quality of support. Although not full AI and VR integration, these companies provide an essential first step.

Millennials, who are predicted to make up 50% of the US workforce by 2020, gravitate towards AI and VR. This aligns with our prediction that VR technology will attract the generation which will soon make up the majority of banking clients, and we believe that banks with the best VR solutions will retain those clients.

How to stay innovative in the future

Not all problems are solved by innovation. The more recent developments, like VR, would not replace traditional digital banking via mobile or websites, but will make up a new channel which banks can incorporate into their existing digital strategy. VR is already being used by millennials in gaming for example, so it makes sense for banks to target the demographic where they are already at. If this is the technology customers are choosing to interact with, combining the immersive experience of VR with well-established AI technology that banks are already using, customers will find themselves in the midst of an extremely personal and relevant banking experience. Feedback from our Finovate demo was promising – people were very excited about the breath of fresh air that VR brings to banking technology!

The CREALOGIX team with our Best of Show award!