Augmented Reality & Virtual Reality Understanding the new digital interface and potential for financial services

Rahul Bansode Associate Director - Technology Augmented Reality & Virtual Reality

Introduction

The Digital space around us has We still primarily use this Digital changed significantly in the last ecosystem as 2-Dimensional decade or so, and the amount of (2-D) space and time. But with time we all spend around digital the evolution and acceptance of gadgets is far more than anybody Augmented Reality (AR) and Virtual would have ever imagined. The Reality (VR) in the entertainment millennial generation that is industry, we are slowly getting growing up in this Digital era prepared for the virtual and accepts this as their natural augmented world – FOR REAL. environment and part of the AR and VR technology enables usual routine. Most of us are new ways of interaction and now quite familiar with internet communication with the virtual usage – browsing, shopping, world (that does not exist) and watching a movie, communicating merges with the real world. AR with friends/family. However, and VR are becoming mainstream, even though this is still a virtual but the pace of evolution is quite environment created in the Digital slow. Currently, the applications ecosystem, we have accepted it of AR and VR are mainly in the as a reality and part of our daily Gaming, Entertainment, Marketing, routines and lives. Just imagine a Education, Fashion, and Art day without internet and mobile industries. phones – though not IMPOSSIBLE, it is not VIABLE either.

Market Overview

$3.5 Billion $26.4 Billion 800+ Financial Backing Market Valuation Companies The approximate value of venture capital The market was $2B in 2016 and is Are currently engaged in the Augmented investment made since 2016. Facebook expected to rise to $26.4 Billion by 2022. Reality and Virtual Reality segment paid $2bn to acquire Oculus in 2014 worldwide.

2 Million 48 Hours 200K Shipping Out Selling Out Developers The number of Google Cardboard The amount of time it took for Samsung The number of developers registered head-mounted displays distributed since $99 Gear VR o sell out on Amazon.com for Oculus to create games on the VR the product’s June 2014 launch and BestBuy.com – an indication of strong platform. demand at lower price points.

150 Million 60/40 Ratio 121 Countries VR Users Hardware/Software Revenue Global Interest In 2014, there were less than one million Out of the total project revenue, The number of countries represented VR users, but that number has incredibly Hardware is expected to generate 57% in the viewership data for the first US grown to more than 150 million users this revenue while Software will generate the Democratic presidential debate, which year remaining 44%. CNN streamed in VR.

Reference - Goldman Sachs – Virtual & Augmented Reality Report – 2016 | GrowthEnabler ARVR Report – September 2016 Augmented Reality & Virtual Reality

Application and Adaptions Verticals

Augmented Reality and Virtual Reality has been evolving over the years as a new means of visual communication and interface. It broadens the horizon of our interaction with the Digital environment and moves away from the 2-D interface of the screen. It is visually possible to create our own visual environment by augmenting the surrounding using the phone, camera, glasses etc., which it does not exist.

Active Usage

Video Games 360 Video and Live Events Design, Architecture Engineering & Virtual Reality games are being one of Rendering a 360-degree video an event, Construction (AEC), Commercial Real the primary application of AR and VR to watch globally or locally resulting in a Estate (CRE) currently. It provides a virtual experience much more immersive experience Virtual Reality, 3D Animation and in a three-dimensional interactive Augmented Reality are being used in environment to play a game. Design, AEC, and Commercial Real Estate to provide architectural visualization, design reviews and approval before the actual construction begins. Next Phase Usage

Education and Training Diagnostics Collaborative Virtual Environment Apart from the gaming adoption, VR and With an Augmented Reality, remote (CVE) AR have been adopted at a faster pace diagnostics, where a person would A collaborative work environment is the in the Education and Training sector be able to visually see, interact and futurist thought process of how people will – primarily in Aviation, Flight Training, collaborate to solve a problem, provide have a working environment to interact, Healthcare, Military Training, and a solution and recommendations. This change, and amend the data within Engineering. is primarily being envisioned in the the virtual environment. A collaborative Medical/Healthcare field where a doctor working environment could be entirely could translate CT and MRI scans into digital, or mixed with the digital and real interactive 3D models and virtually world. perform the procedure and plan ahead of time. Augmented Reality & Virtual Reality

Examples of AR/VR Applications

Healthcare Real Estate Sports

VR has been effectively used in the VR allows the customer and 3D and Virtual reality in sports is being widely healthcare for a year. It provides the 360-degree view of the of the real-estate adopted across the industry for a variety doctor with a controlled environment to – house, building, apartment etc. and of training, live streaming service etc. perform and study the health issue. enhance the real-estate sales. Major Baseball and Football Leagues are In 2016, a doctor in Miami used Google Sotheby's International Realty has begun using VR to train umpires and referees. Cardboard to plan a survey on a baby who experiencing with Samsung Gear VR as NextVR has a contract with Fox Sports as was born with one lung. The cardboard a new showcase for multi-million-dollar the exclusive virtual reality broadcaster for was used to create a 3D image of the homes based in Los Angles, New York. all events covered by the network. baby heart.

Automobile Tourism

VR is used for creating the car design and VR is helping consumers make a decision driving simulators about where to travel and also experience TheLondon Audi City showroom in Green what they could expect. The apps will Park, is the smallest Audi dealership in help convey the intensity and emotions of the UK, measuring 420 Square Meter and the travel experience before the journey featuring 4 models. 50% of the customer begin. ordered vehicle at the store without a Thomas Cook partnered with Samsung physical test drive. and Virtual filmmaker Visualise to create a series of short films in several destinations. Marriott is testing VRoom service – a first- of-its-kind guest service that allows guest to order inspiring virtual reality experience to their rooms. https://lbbonline.com/news/how-virtual-reality-is-changing-the-automotive-industry-for-the-better/ https://appreal-vr.com/blog/5-virtual-reality-uses-in-sports/ http://fortune.com/2015/09/09/virtual-reality-real-estate/ Augmented Reality & Virtual Reality

Key Challenges for AR/ VR Adoption

The year 2016 is the key year for AR/VR and prototypes launched around currently hit the gap-of-disappointment platform as people started to take notice the technology. AR/VR is the prime where the evolution in technology is of this new technology. attraction at the Consumer Electronics trying to overcome the key challenges • Facebook bought Oculus in 2016 for Show (CES) and at the Virtual Reality, before it comes mainstream and ready $2B Los Angles (VRLA) conference/expos, for mass adoption. Secondly, most of where companies demonstrate the the use-cases or prototypes are visually • Microsoft released their Augmented various prototypes and use cases of this very appealing, but the practical usage Reality product HoloLens on 30th technology. But the reality is that it is far remains low. March 2016. from the main-stream mass adoption Some of the key challenges or roadblocks Over the past couple of years, there has at this point in time. Like all the major in the adaption of this technology is as been tremendous discussions, events, technology adoption, AR and VR have follows:

Cost AR/VR technology is relatively new and evolving, thus the costs of all of the components are relatively very high. To build a good augmented or virtual experience, it tasks multiple components to build the AR/VR apps, which include – Headset, Desktop, Software, Content, and Distribution;

Component Details Average Cost

Headset To experience the high-end virtual experience, the user needs $12.99 - $3,000 to a hands-free, mobile and easily accessible device. The headset is one of the key components to experience the AR/ VR world. In the simplest form, a device is a Mobile phone, Google Cardboard box and the high-end if the Microsoft Holocene or Oculus Rift head-mount devices

High-Processing Most of the VR requires a high-end desktop computer $1,500 - $2,5000 Desktop powerful enough to run the graphics hardware on the VR. To be widely acceptable these hardware component costs need to come down below $1,000.

Software The cost of the developing an AR/VR apps is directly Basic Application - $10,000 - $25,000 proportioned to the targeted devices. Also, it depends on Customized App - $40,000 -- $60,000 the use case of the application which could be basic like streaming a video to a more immerse visual experience. Oculus/HoloLens App - $1,00,000

Content AR and VR require a highly immersive visual content which $10,000+ - $25,000 + requires a high-quality camera for recording and intense editing process is a big part of the cost of the content. Additionally, the cost is proportional to the increase in the complexity of the application. • 360-degree Camera • High-end Computer Graphic • High-end Photorealistic camera

Distribution Distribution of the AR and VR component is another big $0 - $$$$$$ challenge and high-cost activity to be considered. Cost is associated with the advertisement of the app using Event, Trade shows, social media and paid advertisement

Ref - https://www.bluelabellabs.com/ideatoappster/how-much-does-it-cost-to-create-a-virtual-reality-app/ Augmented Reality & Virtual Reality

Content Power and Speed Security A few years back, we saw the evolution Both AR and VR are high image As with the evolution of any technology, of 3-D enabled Smart TVs. Most of the processing devices and thus require a the concern around security becomes leading TV manufacturers marketed very high computing power and a very a key aspect for its stability. Right now, 3D TVs, but eventually, this feature of robust hardware component to operate. AR/VR is not yet mainstream, but as it television could not get mass adoption Additionally, these devices are supposed becomes more widely used and rises and the primary reason was the to be highly collaborative and connected, in popularity across additional sectors availability of the CONTENT. Apart from a which would require a high-speed 5G beyond Gaming and Entertainment, few cartoon programs, there were hardly network bandwidth available. Most of the security concerns around data and any show, movies, documentaries etc. currently used PC and desktop hardware devices connectivity will be one of the available to watch. In the field of AR/VR are not capable enough to operate the prime concerns. AR and VR are highly also, the availability of the content is also AR/VR application. The exception to this immersive technology, which uses the a key challenge for wider adoption. There is AR/VR experiences on smartphones internet as their veins to transfer data/ are many 3-D and Virtual Reality video and console devices. But other devices, information for delivery and gathering games available, but real-world – daily like the Microsoft HoloLens, Facebook information. AR/VR has a capacity to usage applications, are generally lacking. Oculus Rift, etc., require a powerful CPU/ constantly record information and has Again, most of the prototypes and POC GPU, high network and internet speed. the ability to impose an artificial world content developed are mainly for demos. Additionally, most of the head-mount VR/ over and above the real-physical-world The non-availability of the content is AR devices are now wireless, but they are which raises a very unique set of issues of the number one challenge for any new high energy consumption devices, and data, privacy, identify-theft, freedom of technology to have mass adoption. thus require high-energy batteries for speech and discrimination. long duration operations. The pressure to bring the technology to The challenge of Power and Speed market quickly will lead to overlooking would require the hardware and the the security concerns, which will be network carriers’ providers to upgrade capitalized by cybercriminals in a very their respective service lines of business. negative way. At the AWE 2015, IEEE Computer machine manufacturers would Standard Association (IEEE – SA) held be required to introduce more powerful networking session to address this machines capable of handling the high- concern and try to bring the technologist performance of the AR/VR application. and policymaker closer to each other and Secondly, the network carrier cellular bridge the gap between technology and companies need to expand network policy. spectrum to higher bands. Augmented Reality & Virtual Reality

Key Takeaways for Adoption in Financial Services Adoption of VR/AR in Financial Services Traditional banks and financial institutions have been awakened by the rise of FinTech Most of us are now well familiar with and the novel way in which they have adapted technology to provide an innovative line performing our routine work and of Product and Services to the digitally educated customer base. There has specifically shopping online without ever leaving been a lot of discussion about using AR/VR in the financial sector both for the internal the comfort of the house. There is a and customer-facing engagements. The following are the key takeaways for adapting huge amount of discussion and debate the AR/VR in the financial sector: about using AR/VR to provide banking and financial services. For a FinTech, this would mean identifying the business Technological Evolving Customer Base use case and introducing a product/ service in line with the use of AR/VR to Revolution With the growth and penetration of the revolutionize the banking services which Since the meltdown of the financial mobile device and tablets market has currently does not exist. In the last few sector in 2008, Banks and Financial had a tremendous influence on our years, banks have been trying to identify Services providers are slow to innovate, daily life. Thus, it is imperative that the the use case and adopt this technology. A as they were concentrating on stabilizing next generation of financial services few of the examples include: needs to be around these devices. their loss and complying to the new 1. Citibank is testing the use of Millennials spend most of their time on regulations imposed on them by the Microsoft HoloLens for building a social networking and mobile devices, government. This was the period when virtual trading workstation the Digital revolution entered a new which provide nearly everything and 2. Commonwealth Bank of Australia phase with the unexpected rise of the any information at their fingertips. The has introduced an Augmented new technology like Blockchain, Artificial Millennial expects the same level of reality app for Real Estate which Intelligence, Machine Learning and service from the banking and financial could help in buying a house Augmented/Virtual Reality. Additionally, service providers instead of the routine the SMAC platform (Social, Mobile, brick and mortar branches. 3. National Bank of Oman has Analytical, and Cloud) has a foundation introduced the AR app for finding and backbone layer of all the Digital ATM and/or bank branches. revolution components. Although the use of AR/VR is in the early Talking specifically about AR/VR, we saw infancy stage, these are very good use the adoption and craze of Pokémon Go cases to test the water and identify the – a mobile phone-based AR game, which potentials of this technology in the sector. shows that there is a market for these The technology revolution is all about technologies. This app is a very good providing an innovative user-experience example of SMAC platform adaption. and customer-engagement that differentiates ones from the others. Augmented Reality & Virtual Reality

AR/VR Benefits for Financial Institutions

The new field of AR/VR is a great opportunity for traditional banking and financial institutions to incorporate as a new service line or value-added service. Financial transactions are increasingly being executed using mobile devices. Thus, providing personalized and location-based services will be a huge opportunity for the banks and financial institutions. Specifically, regarding Retail banking products, the amount of Digital transformation which was required for Savings and Checking accounts is at its peak. Thus, banks need to look beyond Savings and Checking accounts as their innovative offerings to customers. Some of the key benefits are:

Personalized Service Reduce Customer Cross-selling Offerings Engagement Cost Opportunities

AR/VR could help banks and financial As AR/VR could easily immerse in a real One of the best use of the AR/VR could institutions provide personalized services world, this could be useful to provide be providing the platform for cross- as per the needs of the customer at simple and non-transaction-based selling services which are currently not the right time and locations. Based services which could reduce the cost of provided by the banking institutions. on the customer location, provide customer support. Services like finding The Banks have all the financial services to locate the nearest shopping an ATM/branches, list of service offerings, transaction information - amount, shop, mall, deals, discount coupons, ATMs hours of operation, etc. date, location, frequency etc. about and bank branches, and restaurant the customer and thus provide an recommendations. opportunity to cross-sell products and services. Augmented Reality & Virtual Reality

Conclusion

Augmented Reality and Virtual Reality ATM and Branch Locator etc. It all looks justify the use of the AR/VR technology. technology are really getting ready to fascinating for the first time but then one For any innovation to have mass- revolutionize our daily life in a way which asks questions, do we really need to wear adoption- two things are important. we might not have envisioned it. This is AR/VR head-mount device every time to 1. Identify a real-life problem and a technology which is very different in perform these simple tasks which could provide a solution to resolve it bridging the gap between the real and be easily done in the 2D environments artificial world. To harness the power of using laptop and mobile phone. 2. Provide a new line of service which does not exist this technology in a correct way, one Maybe this is not the right way to use needs to wear the innovation cap and this technology. Maybe one need not The same could be said about AR/VR use think differently. Talking specifically try to forcefully fit the current line of cases. Following are some of the simple about the use of AR/VR in Banking and business/services in the Augmented and use-cases which could be thought of as Financial institutions - most applications Virtual environment. This could be one justification for using this technology. proto-typed are around performing the of the main reason why we don’t see real current work or product and services in business use case of this technology. an augmented reality environment. Most Maybe the answer is to understand the of the financial use cases are around capabilities of this technology and the try the Account Portfolio management, to identify new innovative use case which

Tourism Loan Service Live Events Streaming Virtual Locker for Document

Banks could engage as the Banks could engage with Sport Most bank branches provide locker intermediator to cross-sell tourism streaming services to provide live facility to its customer and charge a package and travel loan services. Banks streaming of sporting events, matches small fee. This is good for all sort of could collaborate with Tours and Travel etc. using AR/VR. Imaging getting a 360 physical items to safely keep in the companies create AR/VR Tourism Degree view of the Soccer World-cup locker. Package content for the various without traveling to the venue. In today’s digital world, everyone destination. Providing these services to a value- does have a digital document, files, Banks could identify the customer who added customer of the bank could password, security code etc. which need frequently goes on vacation and offers generate an added source of income for to be safely kept. Banks could provide them an AR/VR view of the complete banks Virtual locker facility using AR/VR which package of the destination. could help their customer to keep the document or other digital content safely.

Cross-selling – Provides an opportunity Value Added Services – Provides Value Added Services – Provides to cross-sell product an opportunity to give value-added an opportunity to give value-added New Product/Service – Provides a services to its customer services to its customer. cheaper credit facility to the customer New Product/Service – Provides a for travel. An additional line of business cheaper credit facility to the customer and income for travel. An additional line of business and income Augmented Reality & Virtual Reality

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