Metaverse & Banking: An Inevitable Breakthrough

Finding a single definition for the metaverse might be redundant as, in its essence, it is a medium of communication that bridges the gap between physical & augmented reality. Expert insight at global finance events like MoRe 2.0 Conference explains how metaverse is already being regarded as the new internet for most of the industry, giving birth to the term web 3.0.

Although virtual reality, its effect has already been felt heavily across banking & fintech sectors. The banking sector, in itself, has gone through multiple revamps through the years. Starting off with the traditional one-on-one approach with little to no personalization for the customers, banks moved on to the age of the internet. This phase saw banking primarily done through smartphones & online portals, along with ATMs taking over the banking world. ATM tech was the first look at the integration of IoT in the banking world, which soon developed into the use of third-party apps for almost all banking applications, on track to render the ATM null slowly and steadily.

Soon after, we were introduced to fully digitalized finance banking using web 3.0 and blockchains. We are currently in the metaverse stage, a virtual banking experience using AR & VR technology. With significant benefits and risks involved, here’s a list to compile some of the major ones below –

Existing Banking Services But In 3D

Globally, it is established that the future of banking will be a combination of 2D and 3D experiences. To gain a competitive edge, banks must adopt 3D models into their existing infrastructure. An interesting study backs this conclusion, with 47% of bankers rooting for metaverse integration & the use of VR and AR technology in banking procedures.

Experts at 2023’s finance & insurance conferences are expected to provide insight into the impact of integrating AR and VR technology from both consumer & employee perspectives. From a consumer perspective, AR & VR being used in banking will be a rather exciting development. The ability to virtually bank, deposit & withdraw money, and interact with bankers using virtual avatars will be nothing short of a revolutionary development. A majority of bankers are raving about this for a good reason as well, due to the possibility of immersive 3D training courses & onboarding remote workers, forming a sense of community.

Enhancing Customer Experience

Major banks already immersed in metaverse development, such as JP Morgan, have spoken about forming a team of bankers focused on customer needs & providing them with a more meaningful and insightful experience. Prioritizing customer needs, these bankers will look to attentively understand the customer’s demands and queries. In doing so, they will be able to provide appropriate insights to customers, significantly enhancing their banking experience & recall value for doing business with them.

A significant industry to be tapped into will be mimicking existing account & banking services in the metaverse. Here’s what that would look like –

• ATM Machines Of The Future – Virtual renders of ATMs will provide a revolutionary experience for customers. Walking into a bank using your virtual avatar, iterating with avatars of bank employees & withdrawing money virtually from your actual bank account is a concept that will appeal to the masses.

• Virtualizing Account Transactions – 3D models of traditional account transactions will also be an immersive experience. Allowing consumers to physically interact with virtual renders of their transaction details, highlight particular points on a form, etc., will provide a more engaging experience.

• Real Estate Gets A New Look – Metaverse will enable users to virtually tour properties of interest & handle property transactions as well. This can be an efficient method for users to also explore financing options in real-time by interacting with virtual banker avatars.

• Wealth & Investment advisory – Customers can receive sound financial and investment advice by engaging with avatars of financial advisors present to aid them in making concrete decisions. Knowing whether to engage in trading or not will be revolutionized by using multi-dimensional visual analysis of future scenarios in market trends. Comparing multiple insurance options with insurance agents to set up a more secure future will be made more accessible & more convenient than ever.

Linking Virtual & Real Economy

A significant factor for the keen interest in metaverse integration from banks has been the spectacular profit trends being noticed. Metaverse is predicted to generate $5 trillion by 2030, a lucrative number for banks & businesses alike, to say the least. An upward trend in the money being generated will force banks to initiate more developments in the world of web 3.0 to research potential ways of moving assets between the digital & physical world.

Virtual Lobbies

Experts at MoRe 2.0 Conference will be engaging in keynotes & panel discussions to talk about everything finance. Metaverse integration in banking is a hot topic right now and is bound to be discussed on stage regarding its early stages & what the future may hold for the banking system.

An expected development in the link between metaverse & banking, virtual lobbies are established to allow banks to host their events on the metaverse platform. An example of this can be a lobby for educating users about the new technology in place, etc. Users can utilize these lobbies to hang out and experience community building. Targeted towards enhanced customer service and attracting potential clients, banks have wasted no time capitalizing on using this technology.

JP Morgan Chase was the first bank to set up their own operational metaverse lobby known as Onyx in their virtual world, Decentraland. Attracting hundreds of thousands of users a month, their target audience are digital natives, someone who has grown up in the information age. With a keen sense of exploration, this target audience is always open to get into business with companies with a similar understanding & vision for virtual worlds.

Some would say JP Morgan established itself as a pioneer in the industry by taking this innovative step toward the future. Their virtual lobby is set up inside the platform’s virtual mall, Metajuku, where users are being educated about blockchain technology & other similar technological developments the bank is involved in.

Climbing The Industry Ladder

Companies rooted in the banking & finance sector have a constant itch to one-up each other when it comes to being labeled as tech-savvy & hightech-organizations. Bankers & financiers make it a point to regularly attend top finance conferences, keeping them up to date on the latest in the industry when it comes to tech developments and what their competition might be up to.

With the introduction of AR & VR technology into practically every major sector there is, the banking industry wasted no time in initiating its onboarding of AR and VR into its existing services. This furthers their case in an attempt to appear as cutting-edge to the rest of the world. Staying ahead of the curve when it comes to the latest tech developments not only allows banks to attract future clients but also to secure top talent in their companies. Competing with the biggest names is a never-ending race, making it as essential as ever to prioritize the swift adoption of the latest technology.

Upcoming finance conferences are sure to touch upon the very real problem institutions from all sectors are currently facing when it comes to finding & hiring the top and effectively skilled talent in the world to leverage these potentially world-changing technologies. Keeping this in mind, banks & financial institutions realized having a strong holding in the metaverse early will make them an attractive destination to be when it comes to working towards future developments.

Potential Risks To Consider

As with any technological development, there are always drawbacks to consider and work upon. Web 3.0 has been built around a few core ideas, one being the concept of decentralization. Decentralization refers to a system built around the idea of decision-making & control spread transferred to a distributed network rather than a single entity or organization. While an appealing concept at its core, there are still major developments required to tackle some of the challenges being presented.

One of the major issues banks currently face when it comes to the metaverse is the lack of regulation. With no legal framework to turn to for protection, banks & customers may be left at risk.

The complexity present with technology such as the metaverse is another challenge for the banks to figure out. The cost behind research & development while dealing with the security risks could pose a big issue, making it seem like we will have to wait a while before we see the seamless integration of the metaverse in the banking system.

Conclusion

Although a fascinating development, it could be a while before we see banks fully integrating the capabilities associated with the metaverse. However, with the future looking more & more AR and VR oriented, it seems inevitable that the banking industry will leave no stone unturned to ensure smooth & secure integration with the metaverse.

Staying on top of the latest surrounding the metaverse and the challenges presented is essential for bankers & financial advisors. Upcoming finance conferences in 2023, notably, MoRe 2.0 Conference, will provide expert analysis along with innovative & fresh perspectives into the challenges and problem-solving developments being conducted.