When Bill Martin recently
donned a pair of virtual reality goggles at Fidelity Investments’ client
advisory council meeting in Boston, he was skeptical about whether the
technology would be of any use for financial advisors.
But after a tour through the
virtual world, Martin, chief investment officer at Wichita, Kansas-based
INTRUST Bank, returned like Neo in "The Matrix," ready to see how
deep the rabbit hole goes.
“I’m now convinced that
tech-savvy advisors will be incorporating VR into their practices in the
not-too-distant future and that the potential applications of this emerging
technology are virtually limitless,” Martin says.
First a fixture of science
fiction and then relegated to video gaming after a disappointing start in the
1990s, VR is making a comeback, and this time, fintech experts say it will find
its place as a tool for advisors to help clients become more educated and
engaged with their finances.
VR and its cousin, augmented
reality, are just two of the latest gaming technologies seeping into wealth
management. Such techniques in financial services can involve programs that
allow clients to compare themselves to similar demographic cohorts and
determine how they are doing in terms of investing, says Sinisa Babcic, senior
manager for financial services at Ernst & Young. Scenarios that allow
clients to play out how certain financial decisions will impact them is another
Gamification as a whole has seen slower adoption in traditional wealth
management, where market leaders have been most interested in techniques that
educate the next generation of high-net-worth heirs, Babcic says.
Martin says VR can be a
useful educational tool to nudge younger people to save money by showing the
impact of their investments, or lack thereof.
“For example, 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,” Martin says.
Other use cases for VR
involve gauging a client’s appetite for risk by simulating market downturns and
offering visuals on how that may play out in their lives, Martin adds.
In addition, VR can be used
to train new advisors by simulating client meetings and different, challenging
scenarios, making it “much quicker than traditional learn-as-you-go training
methods commonly used today,” Martin says.
These various VR use cases
have been cooked up at Fidelity Labs, the innovation incubator at Fidelity
Investments, says Adam Schouela, who leads the Emerging Technology team at Fidelity
Labs. His team has been looking 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. Think of it as a better way to illustrate ideas,
instead of using a whiteboard.
“We are seeing how we may
educate better our customers and give them a different type of experience to
better understand financial concepts,” he says. “We created an application to
understand retirement readiness age. You are presented with decisions and how
these decisions impact the age you are ready to retire. It’s to better
articulate the impact of those decisions.”
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, Schouela says.
For much of the financial
services industry, many use cases for VR and AR have been gimmicky or branding
exercises up to this point, says Lex Sokolin, global director of fintech
strategy at Autonomous Research. Examples abound such as Ally Bank offering an
AR smartphone app where users could catch flying dollar bills.
“I don't think even the big
tech firms yet know the right user experience of VR/AR and wealth management is
several steps behind,” says Sokolin.
“VR is usually good for
emotional journeys, so I would see it as a way to get clients to understand
what aging, or retirement, or parenthood are like, and to plan around it,”
Sokolin adds. “AR is going to change our journey through the world, creating
digital twins out of everything. We can imagine many overlays for budgeting or
emotional software, but this is far from being commercial.”
There hasn’t been wide
adoption of VR and AR technology yet, Babcic notes, the way that smartphones
have. Price and refinement are issues. VR goggles range from $5 headsets at
Walmart to $399 for an Oculus rift, while AR glasses, which can retail from $89
to $1,000, are considered ugly and look more like bulky 3D movie goggles by
some technology reviewers. When Google tested their AR glasses, Glass, critics
widely panned it.
Some advisor tech observers
remain skeptical of both technologies.
Bill Winterberg, technology
consultant to financial advisors at FPPad.com, splashed cold water on
visualization use cases for VR. The presentations may be counterintuitive and
potentially overwhelm clients, he warned. But he remained open to the
possibility of VR and AR becoming mainstays in wealth management.
“Maybe we can have this takeoff
in 10 years,” Winterberg says. “It’s so far out there and so much can change in
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