VR banking: What’s that?

At Cardaq, we are continually exploring new innovations in payments – it’s one of the things we love about the space! And this has seen us blog about all kinds of new technologies, from behavioural biometrics to AI-powered money management apps and virtual cards. These are all continually shaping how we live and – importantly – the role money plays in our day-to-day lives. Which is why we are particularly excited about virtual reality (VR) banking and where this can take things next.

First though, what is VR Banking?

VR banking explained

To answer how does VR banking work, it’s worth quickly covering off how VR in general (and augmented reality, or AR) works too. This is essentially the use of computer-simulated experiences that employ 3D near-eye displays (headsets, basically) and pose tracking to give the user an immersive feel of a virtual world. A crude, but well-known, example could be ‘Pokemon GO’ game where users could see Pokemon in the “real world” through their smartphone’s camera. This novel use of AR (as it was more an augmenting of reality than an entire virtual simulation) opened people’s eyes to this technology and made the game become a global phenomenon.

This brings us VR banking. The VR experience offers an enhanced view of banking, with sophisticated interactivity models allowing consumers to engage in virtual conversations that seamlessly blend with how you expect to go into a physical high street branch.

It’s clear that people still want to communicate with their financial service providers. After all this is why people will often wait for long periods of time on hold to speak to a human being, rather than use a website or FAQ section. Yet, people want convenience and going to a physical branch is often not viable or convenient for many.

Therefore, if banks can create VR experiences with virtual branches, this is an exciting evolution. Customers could theoretically, from the comfort of their home or wherever they are, log on and step into a branch. They could have a helpful conversation with a bank employee, discuss various products and services, and all in a way that – despite the initial weirdness of wearing a VR headset – would quickly become normal and much-preferred to a phone call.

What VR banking means (in our reality)

For banks, this also provides an environment to test and explore the flow of consumer conversations. The most optimised experiences will suggest products and services, but this will, of course, require regulatory scrutiny to ensure compliance with regulatory and consumer-centric guidelines in a programmable space. Like a lot of things with technology, things are now accelerating. French bank BNP Paribas is already offering customers a VR banking experience with an app that helps them look through spending, bills and transactions in a VR environment.

As we’re a payments provider, we’re naturally excited by the applications this technology can have specifically for payments. Intuitive use of VR apps can help how people simplify how they make payments in these environments. One of the best known VR “worlds” is the MetaVerse, described by social media innovator Mark Zuckerberg as “the next chapter of the internet.” In the MetaVerse, users are encouraged to interact with vendors and to treat this like a functioning online marketplace they can walk and talk through. As such, the technology in place means for an even more seamless payment experience. Unlike traditional payment systems that need cash or cards, metaverse payments are entirely digital, which makes transactions even faster and more convenient. You can make MetaVerse payments from anywhere without worrying about varying currencies, time zones, or physical forms of money.

In the MetaVerse, and indeed all virtual worlds, the little frictions that come with transactions are gone. No more entering your pin or tapping your card or device on a reader. Instead, as it’s you in the VR world, the authentication is already built into your identity. You can audibly authorise a transfer, or even just nod approval for a purchase!

What’s next for VR banking

If you’re sceptical, that’s expected. This is new technology after all and – like with all innovations – it’ll take time to get used to the concept. Few people own a VR headset for instance, and so there will be some friction there.

However, the same could be said for mobile phones and there was a time where people would’ve felt awkward talking to themselves in public. For future, more tech-savvy generations who will grow up with VR as part of their life, VR banking could mean greater engagement with financial products and services given it’s delivered via a medium they are comfortable with. What is clear that banking – and financial services in general – is adept at evolving with consumer behaviours and new technologies, so one day a chat in your VR bank branch could seem as natural as taking cash out of an ATM.

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