Metaverse: Decoded: Metaverse and the future of banking

Defining what a Metaverse is and the components it consists of, is key to understanding the potential of the Metaverse for banking. The metaverse is simply a digital representation of our existing reality. Sounds interesting, isn’t it? It has moving pieces of the puzzle that can make it into a possibility followed by a business opportunity.

Platform, technology, marketplace, and commerce play vital roles in developing the metaverse. Participants in each ecosystem are characterized by distinct evolution processes. Holographic and immersive gadgets will be used to create the Metaverse. Digital items are projected into the real world, appearing as if they are actually there, with holographic devices. Virtual reality replaces the physical environment and provides an immersive experience by concealing it.

You might be thinking about how this is even affecting the business in general. Banks are a very great example of how the metaverse can change the way industries and individuals think about a product or service.

One of the significant changes that the metaverse brings to banks is the potential for a highly immersive user experience. They can tailor their digital spaces to suit individual customers or provide a consistent experience across the board.

Current applications have users perform basic tasks like transfers, balance checks, and so on from mobile devices. Yet, the read-write format of current iterations in mobile banking applications is what the metaverse can change.

This not only extends to services but to products as well. Imagine doing all the banking activities that happen at a physical branch from the comfort of your home. Customers can withdraw cash from virtual ATMs, browse branch shops, and sponsor virtual events using the metaverse.

An avatar adviser could easily walk to them for an appointment; you can enter the PIN, withdraw funds into your digital wallet, and maybe use those funds to purchase a book in the store next to it. Unbelievable? It’s all possible, provided the banking industry pushes the boundaries of what is physically possible.

Additionally, with NFTs, cryptocurrencies, and other use cases of blockchain gaining traction, the metaverse is essentially a massive, untapped market for banks. It could create new pathways for wealth generation while also allowing for seamless trading, purchases, deposits, and withdrawals. It is a whole new economy that requires innovation as well as immersive experiences to thrive.

The metaverse can also provide banks with the tools they need for an enhanced customer service experience. A healthy balance of AI and the human touch, combined with immersive virtual environments, can address a lot of the pitfalls banks face in dealing with complaints or queries. It can also help with training employees internally through VR simulations.

Another important factor to consider is branding. A new, tech-savvy generation of users is becoming increasingly engaged with the metaverse. It becomes necessary for banks to be present on this platform to remain accessible to their consumers. When we look at how internet banking was first viewed compared to how ubiquitous it has become, the metaverse is the next logical place for banks to try attracting new customers!

These changes are simply the tip of the iceberg. There is a lot of potential for innovative use cases which could usher in further change! Big players like HSBC and JP Morgan have already entered the fray. According to Bloomberg Intelligence, more companies are expected to jump on the bandwagon, pushing the market to $800 billion by 2024.

A metaverse is a versatile tool for the banking sector, yet the challenge still remains with the bankers, designers, and security developers on integrating its unique features into customer experiences. Metaverse has a lot in store for every industry that would love to create new products, expand the market, enhance the customer journey, and give a unique experience overall. Let’s see what the future holds.

(The author – Vijay Pravin Maharajan is Founder & CEO, bitsCrunch)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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