When Facebook acquired Oculus for $2 Billion in 2014, it almost sparked the VR trend. While google did move first with Google cardboard offering VR, it was more of a proof of concept. Last year, about $2 Billion was invested in VR making it one of the hot trends along side AI and Blockchain. Earlier this week, Improbable announced an investment round of $502 Million, led by Softbank, in which Andreessen Horowitz and Horizons ventures (existing investors) also followed up. This puts Improbable’s valuation at $2 Billion. Improbable specializes in using cloud-based distributed computing for VR that can be used not just for gaming but other real-world simulations, and of course fintech.
The first major commercial moment for VR happened when Oculus Rift launched in 2016. This was quickly followed by HTC Vive. However nascent the VR industry is, the initial feedback from hardcore VR fans is that HTC Vive beats the competition (Oculus, Samsung’s Gear VR, Sony’s playstation VR and of course Google’s cardboard) hands down. However, sales of most of these headsets have been really poor compared to analysts’ estimates almost feeding the argument that VR could be a fad.
Most of the time I hear VR, I hear about headsets but the software and developer community almost take a back seat. But one can’t grow without the other. Improbable are focusing on building an ecosystem of applications for VR, through their Operating system – SpatialOS. While most of their apps are currently focused on Gaming, Softbank would steer build out of use cases for real life problems.
“Improbable’s technology will help us explore disease, improve cities, understand economies and solve complex problems on a previously unimaginable scale. Along with machine learning and the internet of things (IoT), Improbable’s distributed computation technology represents a critical next frontier in computing.” – Deep Nishar, SoftBank
Earlier this year, SwissQuote launched their trading platform on VR, where users make trades with a glance. The virtual dealing platform feeds real-time Swiss Market Index data, currency pairs and the main indices to users. Eye-tracking technology enables users to bring up more information about a specific stock and execute trades to a pre-configured value by focusing their eyes on the symbol.
So, can VR provide main stream financial services? Some of the challenges I see are the following,
Cost of VR: HTC Vive, that apparently provides the best VR experience costs about £750. While Gear VR that focuses on Mobile based VR instead of Desktop VR is affordable, the experience is not quite there, and it also depends on how good your mobile is. For example, a seamless retail banking experience on VR might be hard to achieve in a mobile VR environment.
Clunky Hardware: The current designs of VR headsets make it hard for consumer adoption. This is a key problem to solve if VR has to go main stream. Also, for most good VR experiences, motion sensors and base stations are needed. This adds to the inertia when one wants to use VR for anything other than entertainment.
Non-Standard Software: VR hardware providers have taken different approaches to their ecosystem. HTC has taken an open approach, where as Oculus ecosystem is closed for competition. A standard operating system with rich applications, open to all VR devices would be Nirvana. Improbable are headed that way.
Use Case Evolution: Gear VR is the most successful VR headset so far because, it has tied itself to mobile rather than desktop. But application of VR also needs to change direction. At the moment VR apps are very entertainment focused, and in order for VR to go main stream, I believe, they have to be communication focused. IPhone may not have taken off so well, without the Phone functionality.
Many of the above challenges may not all apply if one used VR as an employee of a bank that has the infrastructure to provide financial services in a B2B context. However, in the consumer banking space, the uptake would be slower.
If I had a sleek, not too expensive VR device to talk to family back in India, and can receive rich day to day VR experiences from a standardized VR app store, there is no reason why I wouldn’t use VR to talk to my banker. Improbable could be the software platform of choice for all VR devices, however someone still needs to solve the hardware barriers. Because at the moment, atleast on my head, VR is just a more sophisticated Nintendo Wii. There are some ambitious projections for VR headsets from 15 Million in 2016 to 39 Million in 2018, but many VR projections in the past have not been met.
How nice would it be if I could VR my banker to discuss a mortgage as soon as I have viewed a property in Spain without leaving my lounge in London?
How nice would it be if I could VR my insurance provider when I need to make a claim on a car accident?
How nice would it be if VR went mainstream for Financial Services? Let’s dream on!!
Arunkumar Krishnakumar is a Fintech thought-leader and an investor.
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