Bank of Pikachu? What does Pokemon Go mean for banking?

You cannot have missed the latest craze for Pokémon Go. Hordes of zombified individuals are wandering around your city, staring at their mobile devices. They are hunting for Pokémon.  These ‘pocket monsters’ are animated characters which users collect, train and fight. Users visit PokéStops and Pokémon Gyms hoping to catch wild Bulbasaurs, Pidgeots and the like.

Launched by Nintendo and Niantic, Pokémon Go has been downloaded around 40 million times since its launch on 6 July 2016 – around 2 million downloads a day. It has become a cultural phenomenon and represents a turning point in the adoption of augmented reality (AR). Pokémon Go overlays its character onto a view of the real world, making it the most adopted AR application yet.

Banks have already dipped their toes in the waters of AR. Using AR for branch and ATM location finders has become widespread - here is an example from the National Bank of Oman: https://www.nbo.om/en/Pages/Personal-Banking/Support/Augmented-Reality-App.aspx  The Federal Bank of India offers an AR calendar which provides relevant messages when viewed through a smartphone: http://www.federalbank.co.in/arappt01.  There have also been more sophisticated applications of this technology. Commonwealth Bank of Australia launched an AR home finder app in 2011 and Halifax followed in 2012.  (https://www.finextra.com/news/fullstory.aspx?newsitemid=23689).

So why is now the right time for AR to take off? Goldman Sachs issued a report in February that virtual reality and AR could become the next big platforms (http://www.goldmansachs.com/our-thinking/pages/virtual-and-augmented-reality-report.html. In their view, the market will reach $80bn by 2025. The underlying reasons for this growth are largely to do with the improvements in technology. Devices are faster – due to greater processing power. Graphics cards are better, providing a more realistic experience. Most important of all, smartphones are pervasive. Most users already have a device which can be used for AR – and after Pokémon Go, increasing numbers have been exposed to AR and are familiar with how it works.

So, how can AR be used in retail banking? Is it a solution looking for a problem? Undoubtedly, more thinking needs to go in the application of AR. There are opportunities to use it as a way to illustrate more effectively the benefits of a saving product, by displaying 3D graphics. Alternatively, customers could use AR to view information overlays in shops - which could advise the best value way to buy a product – which card to use or the cost of a loan, etc. However, for me, the most exciting possibility comes through the replacement of branch visits through simulated face to face interactions using AR. Instead of visiting a branch, have a realistic face to face interaction in the comfort of your own home. AR could create the illusion of a bank advisor sitting at your kitchen table with you. This would radically reshape the business case for maintaining a branch network.

There are still limitations to AR. Staring into a mobile device is inconvenient. With the demise of Google Glass, there is no big name smart-glasses product in the market. However, many smaller vendors, like Vuzix are progressing with their devices – and we know Google will be back.

So, I think we will look back at 2016 and see it as a turning point for AR – when Jigglypuffs and Venomoths herald the emergence of a significant opportunity for banks.

What do you think?