The banking industry is not new to the virtual world, giving consumers the ability to purchase crypto and use services without leaving the virtual digital world. We all recall our first visit to the bank to get our first car loan or savings account which was an immersive, exciting experience starting our long-lasting relationship with the bank. What will be the experiences of banking for future generations? The personal and humane experience of the past, has been lost in the impersonal virtual digital world. Will the Metaverse get the personal touch back by creating a virtual world that will be both immersive, personal, and efficient?
What is "Metaverse"
Metaverse can be defined as a persistent virtual shared space, which provides an immersive experience through enhanced physical reality. It is a sum of Virtual Reality (VR), Augmented Reality (AR) and the Internet. VR and AR are not new and have been leveraged by the Gaming industry for years but this technology is new to the banking industry and could act as a huge disruptor. The potential of VR and AR to create a powerful virtual world and provide an immersive user experience is still not fully realised.
Metaverse can act as a catalyst in the way banks engage with their customers, invent new products and enable services.
Leveraging the Metaverse in the Banking Industry
Metaverse banking offers an enhanced experience to customers to view their balance, pay the bills, and make transfers through an AR/VR user interface.
Although the technology holds promise for the banking industry and potentially solves many issues customers face, the banks which have entered the domain are still slow with adoption. Some relevant metaverse use cases in banking which illustrate the point
- JP Morgan – They have opened an Onyx lounge in ‘Decentraland’ (Ethereum-based virtual world platform) metaverse where they facilitate cross-border payments, financial assets creation, safekeeping, and trading.
- HSBC – They have invested in a plot at The Sandbox metaverse, which will be developed for engaging with the gaming and esports fans.
- Standard Chartered – The bank has also acquired land in The Sandbox, which it plans to use for experimenting and creating new experiences for clients on the metaverse.
Rethinking the Consumer Experience - elevation of existing functionalities in 3D
Enabling a three-dimensional employee and customer experience will allow banks to give elevated offerings where they are able to connect with a new generation audience and provide a superior immersive experience. Some key examples are:
- Metaverse banking offers customers the ability to view their balance, pay the bills, and make transfers through AR/VR platforms.
- Enhanced employee experiences deliver immersive learning through simulated customer scenarios and onboarding remote workers with a feeling of community.
- Multi-faceted customer engagement in the metaverse gives banks the opportunity to relook at how they interact with their customers and what they can do to deliver empathetic service through avatars. The immersive experience leveraging metaverse will affect financial services in the following manner:
- Personalized connect: In the metaverse, banks can give high-touch service to the customers by giving them a virtual look into the portfolio and expense revenue, having virtual financial planning sessions, and making well-strategized product recommendations.
- Brand extension: Banks can extend their physical experience in the virtual world by mimicking events like ATMs cash withdrawals, branch placement and layout, and more.
Leveraging the Metaverse with new products
Banking in the metaverse comes with numerous opportunities to tap the space with innovative banking products like –
- Digital payments
- Digital assets like NFTs (Non-Fungible Tokens) and cryptocurrency
- Digital twin (digitally replicating a physical asset in the virtual environment)
The Opportunity
The constant pressure to innovate and optimize processes has resulted in a touchless digitized banking experience for the customer, The metaverse, offers banks the golden opportunity to bring humanity back to that experience and offer customers a new framework which can reach out to the next generation. With the metaverse, a bank can combine the convenience of digitization with the intangible benefits of a more humane and immersive experience.
Morgan Stanley and Goldman Sachs found that the metaverse domain is set to be as big as $8 trillion in the coming time. To take advantage of this market opportunity, banks have a critical role to play. Using technologies like AR/VR and cryptocurrencies, banks will be able to reimagine how they interact with their customers and with what offerings.
