Impact of Metaverse in The Banking Industry

Metaverse will be the next generation technology that will bring fundamental changes in the interaction with banks in the digital world and enhance the consumer experience with banking services. Metaverse will also help to pioneer new services and products in the banking industry.

The metaverse is no longer the science fiction dream of a few visionary pioneers but a tangible reality and a growing business opportunity that already has implications for the future of work. When Robert Half International helped a large manufacturing company develop a 3D website accessible from any device via the web, the metaverse's first use in a business context applied to selling products and services. Over time, the metaverse has evolved into a broader spectrum of business. The applications, with each use of the metaverse, bring new benefits.

The Metaverse will revolutionize the global economy and finance industry.

Metaverse and modern technology could take the banking industry to new heights. Experts have predicted that the metaverse can completely revolutionize the ways of digital banking and the perception of banking. And it's not hard to imagine that you could visit your bank without stepping out of your home, you need to pop on a VR device, and you're there! Goldman Sachs estimates that the metaverse, which would likely be enabled by the development and use of AR and VR, will create over $1 trillion in new annual revenue, helping the digital economy grow to $8 trillion by 2025. The global GDP is projected to be 40% by 2025 due to the rise of a metaverse in the banking and investment sector.

A shift from traditional banking to banking in the metaverse

A bank can also use metaverse experiences to provide new customer functions, such as doing their banking remotely without leaving their homes. Looking ahead, banks could use metaverse technology to develop new services. For their consumers, such as virtual loan origination. Banks can create a financial town in the metaverse where customers can meet and interact with a virtual agent (called a "digital bank teller" or "bank agent") in a way not available with a traditional teller.

Bank of America has been working since 2015 on the "branchless banking" strategy. It seeks to offer a product that is "more convenient, more accessible and more easy to use" to help customers access their bank accounts "with fewer lines of code and fewer clicks" (BofA). They consider it an essential part of their strategy to achieve customers' entire financial lives within their context. When customers need to manage their money or their family's financial future, they can do so without having to leave their homes or call a toll-free digital number and access banking services digitally.

Enabling the banking services in 3D for an immersive experience

Getting internet services in the banking sector took a decade of time and effort. But mobile banking took around 5 to 6 years to reach the customers. The future of banking will be a combination of 2D and 3D. Banks will have to adopt 3D to gain a competitive edge. As we travel beyond 2D to 3D, the banks can design an expansive universe with the ability to make the customer experience more immersive. It is predicted that 47% of people will use augmented reality (AR) and virtual reality (VR) to channel their banking transactions by 2030. BNP Paribas has already used VR for account opening and banking transactions. The banks are planning to use the technology to enhance the customer experience. 3D technology will help to improve the consumer experience in banking.

Enhancing and engaging with your customers in meaningful new ways

This generation of "experience bankers" will be empowered to better understand people's financial needs and the devices through which they interact with those needs. They provide deep and meaningful insights into their customers' economic challenges. These insights will be shared with the customer, increasing the personal touch vital to customer service and various digital natives. The experimental bank will allow employees to interact with customers more meaningfully, and the bank's digital experience will allow customers to engage with their bank more meaningfully.

JPMorgan says it will build a digital generation of "experience bankers" to enhance the human-to-human relationship between financial institutions and customers in the metaverse.

Inventing new products and establishing new markets in the metaverse

With the emergence of the metaverse, banks can leverage their brand and reputation. And they can provide effortless customer interactions, like cash withdrawals from virtual ATMs, branch storefronts, and real sponsorships for virtual events in the metaverse. Extend this to the art of the possible, and you could virtually book your appointment with your avatar advisor at an ATM and enter your PIN to get money in your virtual wallet. You can walk next door in the virtual world to buy handbags, and these innovations will enhance the customer experience, creating new products and markets.

Use of Blockchain technology for financial services in the metaverse

To enable the growth of the metaverse, adjoining products and technologies like cryptocurrencies, NFTs, and smart contracts in the virtual world will also rise. Even though it is unclear how NFTs will be used in this space, existing metaverse options like Sandbox and Decentraland are already using the technology. Banks can provide loans and credit services and accept NFTs as collateral in the virtual space, or they can facilitate payments for NFTs. Virtual real estate is another opportunity where banks can lend money for digital plots and houses.

Conclusion

As we can see, there will be many opportunities for banks and financial institutions in the metaverse. But there is a need for considerable investments in expanding the metaverse and taking technology to the end consumer. However, for technological support and proper execution, banks and financial institutions will require expert and talented engineering teams to build this infrastructure for their consumers and enhance their user experience.

We, as Humancloud, enable banks and financial institutions with modern IT technology by building a team of talented IT engineers for our clients. The engineering team creates innovative and technologically advanced products on the client's behalf. The engineering team takes care of building this technological infrastructure for our clients and executes their end-to-end product development process. We would love to become a part of your futuristic banking ecosystem.

Are you a bank looking to enter the metaverse? Talk to us today!