To change the way customers shop for big-ticket items, USAA is betting on AR

USAA believes augmented reality can help customers make decisions more quickly, and it’s testing that theory on car buying.

USAA customers who are part of a trial can log into a standalone car-buying app with their unique banking information, and then use their phones to scan cars they’re shopping in order to pull up information about the model, along with insurance and financing information.

The San Antonio-based financial services organization, which serves 12.4 million active and retired military members, then combines information about purchase intent (for example, car price and model information) with a customer’s USAA profile to speed up the shopping process. The app uses a visual recognition tool from AR tech company Blippar to recognize any car made after 2000, and within minutes, it calls up car prices, insurance quotes, and information on similar vehicles for sale in the area. Because the app is connected to a customer’s financial profile, it’s able to accurately predict insurance prices that align with the customer’s credit history. While USAA offers the insurance and loan quotes, car-pricing information is served up by car pricing and information platform Truecar.

“What we’re looking at with our strategy is a simpler way to engage our membership — the app is about car shopping and buying; in today’s world, if you want to start a car-buying experience, you have to go to someone’s website and start laying out a series of drop down menus,” said Patrick Kelly, avp of digital product development at USAA. “Through our computer vision technology we’ve eliminated the need for that.”

Kelly said USAA considers the app an AR tool because of two capabilities: the ability to use computer vision technology to recognize an object in front of the camera, and because it can quickly provide details about the recognized object on the screen. On top of that, it’s able to add loan and insurance prices based on a customer’s financial profile — a set of information that would typically require the customer to spend a lot of time consulting various websites.

The app, which will be tested on between 500 and 1,000 USAA members, will give USAA an idea of how customers will interact with the AR tool and whether additional features will be required to enhance ease of use, Kelly added. USAA is not alone among banks and financial services companies dabbling in AR to help customers better connect with products. In March, Capital One announced that it would be rolling out an AR-enabled tool within a few months (it has still yet to launch) and prior attempts have made by the Commonwealth Bank of Australia and U.K. bank Halifax dating back as far as 2011 for the purposes of home buying.

Despite the lack of wide adoption from prior attempts in financial services to use AR, Kelly said advances in smartphone technology (for example, the iPhone ARKit tool) and a higher smartphone adoption rate mean the time is right to go full steam on the technology as a way to improve the effectiveness of customer interactions with financial institutions.

“I’m reluctant to say limitless [possibilities], but I do see many applications. For retail financial services, it’s one of the things that helps people make the best decision; what AR does for us is it gives an opportunity to be earlier in the process of performing a transaction — it’s an opportunity to not be heavy handed, but just give the information to you that will hopefully help you make a more informed decision,” he said.

Despite multiple potential uses for AR in financial services, it’s early days for the technology, and USAA is making a bet that user adoption will grow through advances in the technology. For now, AR as applied to financial services is more of a nice-to-have than a must-have, a tool to play with for early adopters. Brand marketers have also yet to be fully on board with the technology. According to a Forrester study carried out last year, only 5 percent of brand marketers were using AR. Many brands, including L’Oréal, have already experimented with AR but few if any of these initiatives have scaled, the study reported.

“L’Oréal’s app Make Up Genius seems like an outlier with dozens of millions of downloads, [and] the reality is that regular AR app usage is still limited according to several former L’Oréal executives Forrester interviewed,” wrote Forrester principal analyst Thomas Husson.

To go fully mainstream, the combination of an easy user interface, a compelling value proposition, and effective marketing is essential, argues Aite senior analyst Greg Donaldson.

For now, USAA’s AR test is confined to a group of volunteer customer product testers keen on exploring its capabilities. AR has potentially transformative potential in the auto insurance area, especially if customers can take pictures of their vehicles and claim processors can view the images overlaid over what they ideally should look like, Donaldson said. Beyond insurance, however, AR also has the potential to help staff members at banks and financial services companies more effectively communicate with customers through the use of AR-enabled tools as visualization aids, making abstract financial products seem real and tangible.

“It could change the game in terms of what’s possible for [bank staff members] to convey visually,” said Atul Hirpara, CEO of AVA Retail, a tech company that works with retailers and banks. “With the right tools, it could make products more palatable for the customer.”

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