Experts say virtual and augmented reality could be game-changing for how Wall Street views data in the next decade


Virtual Reality

  • With 2020 quickly approaching, Business Insider is polling experts to find out what big tech changes are in store for Wall Street in the coming decade. 
  • Some financial firms are already starting to consider how to use virtual reality-type technology to help visualize the deluge of data they receive.
  • Firms including TD Ameritrade and Fidelity have developed proof-of-concepts using virtual or augmented reality technology for everything from trading to education. 
  • “Immersive experiences are going to provide much more opportunities and by 2030 be completely game-changing,” Vijay Sankaran, TD Ameritrade’s chief technology officer, told business insider. 
  • Bank of America is currently working with the Unreal Engine, a popular gaming engine used by the likes of Fortnite and Gears of War, to learn how it can improve its data visualization capabilities. 
  • But sources say that the VR hardware in its current form isn’t sophisticated enough for wide-spread adoption. Still, that hasn’t stopped firms from continuing to put resources into pilots and experiments of the technology. 
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Virtual reality is already seen as a way to duel dragons and fight off assassins from the comfort of your couch, but financial firms are looking to use the tech to take on arguably an even more fearsome monster: complex data sets.

If you’ve spent any time watching television over the past few months, you’ve probably seen at least one of the many commercials touting virtual reality products as the must-have gift of the holiday season.

The concept of VR actually dates back to the 1800s, and the term has been around since the mid-1980s, but the maturation of the tech in recent years has led to a bigger push to get more wide-spread adoption amongst consumers. 

VR is also proving useful from a business perspective. When it comes to training, designing, and building, virtual reality has been valuable for a variety of companies in industries like real estate, manufacturing, and hospitality. 

Financial services, however, has remained a noticeable holdout. Save for a few tests or small implementations run by a handful of firms, Wall Street has largely preferred to remain in reality.

But as analyzing complex data sets increases in importance across finance, the practicality — and benefit —of using some form of enhanced reality to digest information and visualize multi-dimensional outcomes not only seems likely, but undeniable, according to some experts.

“I think this is a great emerging area,” Vijay Sankaran, TD Ameritrade’s chief technology officer, told Business Insider. “For people who want to work with their finances in a much more visual way. People who want to interact with their advisors. People who want to visit educational resources. Immersive experiences are going to provide much more opportunities and by 2030 be completely game-changing.”

The potential for VR is there, but hardware needs to improve

To be clear, virtual reality isn’t a completely foreign concept to financial firms.

In June 2016, Citi published a video on YouTube demonstrating how a trader’s work station could potentially be set up using augmented reality, a form of virtual reality in which users still interact with and see the real world. 

Meanwhile, Fidelity trained employees working in customer service using VR in 2018. The pilot was specifically meant to focus on empathy, and resulted in improvements in customer satisfaction from those that went through the training. 

Sankaran said TD Ameritrade, which rival Charles Schwab is set to acquire in a deal closing in the second half of 2020, has also done its fair share of experiments using the technology. The Omaha-based online brokerage tested the tech with its registered investment advisor community and in use cases around education and trading.

For the latter two, Sankaran said a virtual roller coaster was built to indicate the ups and downs of the markets with the ability to integrate other stocks into the ride.

While the experience was interesting, and indicated the potential of the technology, it was clear there was still a long way to go. In particular, Sankaran was adamant VR goggles that block out the outside work are not a practical use case.

“I think the whole notion of putting on a VR headset and doing something is off putting to people,” Sankaran said.

What’s more likely to succeed, according to Sankaran, will be some form of augmented or enhanced reality that is intertwined with reality. Eventually, Sankaran said, televisions and phones will have the ability to make holographic projections that users can interact in. 

“I think it’s going to be more not that you are fully blinded from the rest of your surroundings and environments but you are actually in your surroundings and environment but it just is an incredibly immersive experience,” Sankaran said. 

Options trading is crying out for a way to visualize complex data

He’s not alone. David Karat, cofounder and chief creative officer at brokerage Dash Financial, also believes the future won’t be in goggles.

Dash, which handles 15% of the daily US options volume, has toyed with the tech, building out three different VR-based proof-of-concepts over the years.

The company has good reason to show interest in investigating the benefits of the tech. Dash deals in the highly fragmented options market. Executing trades for clients can often times be a difficult, complex task that proves hard to explain in a cohesive way.

Thus, a new way to show information in a more digestible and interactive way is appealing, Karat said.

“If you were in a room of data that effectively is like looking at a graph in 360 and being able to see patterns and move things around it, it does help quite a bit rather than looking at a two-dimensional Excel chart,” he said. “Things like what-if scenarios. If I change this what would happen. Being able to visualize that.”

For Mazy Dar, CEO and founder of startup OpenFin, the case for VR-type technology infiltrating Wall Street makes sense, even if it might take some time.

Dar, whose company pitches itself as the operating system of finance, said he could imagine a world where a trader could look over to the sales desk and immediately see the quotes they are getting from customers in real-time displayed via some type of augmented reality. 

And while pulling off something like that is still a long ways away, Dar said, the potential is there.  

“There are certain things you just can’t automate, and certainly not within the next 10 years,” Dar said. “At the end of the day, when it comes to enabling humans and when it comes to visualization, what are the next tools and other capabilities that you can give people to better do their job. I see augmented reality as a natural extension of this.”

VR is a 10-year roadmap 

But how soon until we see real adoption of the tech? 

Sources estimate it’ll take roughly a decade for some type of VR tech to become a mainstay at financial firms. A big hurdle in that timeline will be the improvement of the actual hardware, as the current form isn’t suitable for widespread adoption. 

But that’s not to say firms are sitting on their hands in the meantime. Bank of America is currently working with the Unreal Engine, a popular gaming engine used by the likes of Fortnite and Gears of War, to learn how it can improve its data visualization capabilities. 

The experiments will be focused on trading capabilities, but viewed as being potentially applicable across the bank, according to a Bank of America spokesperson. The goal is to have a prototype rolled out in 2020. 

Speaking at WatersTechnology conference this month, David Reilly, Bank of America’s global banking and markets CIO, said the future of the trading floor wouldn’t simply be two-dimensional and elaborated on the firm’s efforts. 

“So now we can present the information to you in a way where quickly you can say, that’s pretty much what I would have expected, or no it isn’t, I need to go check that out,” he added.

“Moreover, that information can be presented to compliance in real time, to risk, to audit, and—maybe one day—to the regulators so that everybody sees the same information. And we think that’s going to extend to all of our businesses.”

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