Virtual Reality: The Next Big Thing In Financial Management?
Updated on May 25 2018
Virtual reality (VR) could be the latest in financial management. That’s right; tech-savvy advisors can start incoporating VR into their practices to help educate their clients.
The potential applications of virtual reality as an emerging technology are practically limitless. Informed financial advisors will be able to incorporate VR into their practices in the not-too-distant future to help educate and engage their clients.
Bill Martin, Chief Investment Officer at INTRUST Bank, who ‘tried out’ VR goggles at Fidelity Investments’ client advisory council meeting in Boston feels the technology can be a useful educational tool to nudge younger people to save money by showing the impact of their investments; and can help older people gain insight to get motivated to be proactive about financial planning. He comments:
“A low savings rate could be visualized by showing a future state of struggling to put food on the table or pay for healthcare services, in contrast to a high savings rate scenario that shows a comfortable retirement lifestyle. Retirement plan advisors could use such a tool to positively motivate participant behaviors, leading to improved retirement readiness.”
Today, the “Silver Tsunami’ of aging baby boomers who are not adequately prepared for retirement is draining government resources. Virtual reality provides a great option to help people understand the need for financial planning and retirement savings.
Virtual Reality and Augmented Reality: The Wave of the Wealth Management Future
Along with VR, augmented reality (AR) is another gaming technology that is influencing the financial services and wealth management industry. The gaming techniques in financial services can involve programs that allow clients to compare themselves to similar demographics to determine how they are doing in terms of investing.
Think about it: A full body sensory experience provides more education for people than reading a pamphlet or just talking to an advisor.
Virtual Reality and Augmented Reality in Retirement Planning
VR and AR provide tangible scenarios that allow clients to ‘play out’ how certain financial decisions will impact them in the future. For example, many Americans don’t adequately prepare for healthcare costs in retirement and the virtual gaming technologies can provide real-life examples of what happens in these situations.
A tour in the virtual world of finances and proper planning through the decades provides an engaging education unlike anything else in the marketplace. Financial advisors can use the tools to their advantage and to their clients’ advantage. It’s really a ‘win-win’ situation.
Gaming as Education in the Financial Services Industry
First a fixture of science fiction and then relegated to video gaming after a disappointing start in the 1990s, VR and AR are literally providing ‘eye-opening’ opportunities for investors. Here are a few ways these technologies can inform Americans about the importance of financial preparedness:
- Educating a clients’ risk appetite by simulating market downturns and offering visuals on how that can impact their lives.
- Displaying the importance of different investments, risky and conservative, throughout the years to show investing changes as you age.
- Training new advisors by simulating client meetings and different, challenging scenarios, helping to expedite training.
These various VR use cases have been brainstormed at Fidelity Labs, the innovation incubator at Fidelity Labs, an emerging technology team through Fidelity Investments. The teams basically look at various financial services applications for VR and AR or a combination of them, specifically for customer education, employee training, data visualization, and collaboration between advisors and clients, or within teams.
Fidelity Labs just introduced Cora, which it calls a VR “agent.” Built using Amazon Web Services’ VR application Sumerian, Cora can answer questions on how stocks are doing, pull up company charts, and answer questions on how a company is doing. A client can verbally ask Cora questions in a VR chat room.
Cora is a prototype, and the VR/AR employee training programs are in the pilot stage, but the possibilities are limitless.
The Evolution of Financial Services
While VR and AR are good for emotional journeys to help clients understand what aging, or retirement, or parenthood are like, and to motivate action around financial planning, there’s still a long way to go.
“There hasn’t been wide adoption of VR and AR technology yet,” notes Martin. “Maybe we can have this takeoff in the next decade.”
That being said, it’s interesting to think about where financial services is headed in the future. In the mean time, contact an expert financial advisor to help you gain the insight you need to properly plan for your future.