That the number of brick and mortar banking locations is decreasing is not news, nor is the corollary that traditional financial users are increasingly relying on technology for banking transactions.  About 8,000 banking locations have closed nationally in the last decade and an estimated 90 percent of banking transactions now take place online.

What may be a surprise to those not immersed in the daily permutations of the financial industry is the growth of virtual reality (VR) and augmented reality in the sector. You heard it right: VR and AR aren’t just for video games anymore and are positioned to further replace physical banking locations.

Webster’s Dictionary defines virtual reality as “an artificial environment experienced through sensory stimuli such as sights and sounds, provided by a computer and in which one’s actions partially determine what happens in the environment.” Augmented reality is a step-down and is defined as “an enhanced version of reality created by the use of technology to overlay digital information on an image of something being viewed through a device like a smartphone.”

In short, AR alters the perception of the environment while VR completely replaces the user’s real-world environment with a simulated one.

Let’s review how developments in this arena are changing banking.

First, millennials, raised on VR games like “Call of Duty” or AR games like “Pokemon Go,”  already expect superior technological service and will increasingly expect VR and AR to evolve for use in daily tasks. This generation is also more accustomed to self-service and is less likely to walk into a bank branch than previous ones.

More smartphones will start to offer AR technology – hundreds of millions by the end of 2018, predicts Google.

As a result, AR and VR will evolve rapidly; think Skype on steroids. With this evolution, we are likely to see either completely virtual banks, which will give customers even more banking autonomy than today’s online deposit systems allow, or hybrid bank branches. The hybrids may be unstaffed, mini-locations housing technology for chatbots, robots, or for video conferencing when customers need a live service representative.

One of the first developments in the use of chatbots. USAA, the diversified financial services firm serving military service members and their families, already is offering limited voice banking and Capital One is connecting by Amazon’s Alexa to give their customers banking- by-voice options.

Other major banks are soon to follow. Bank of America reportedly is working on voice recognition technology to be facilitated by a computer, as is Wells Fargo.

Additionally, platforms are improving the integration of speech enablement with natural language processing (NLP), which takes user input and translates it to computer language, for a smoother and more utile customer experience.

Price continues to be a hindrance to use of VR and AR technology for individuals. Around 73 percent of millennials surveyed express interest in it but the price point – when the VR version of “Call of Duty” was introduced in 2016, it started at around $400 – but the cost currently is prohibitive. Many younger consumers lack the disposable income for $300-$500 VR devices.

The technology certainly will be popular in urban areas, where many brick and mortar banks are closing despite a high concentration of customers. Enhanced and high-tech banking options will also be a boon to users in rural or remote areas, where it will give them service options currently unavailable to them.