Historically, banks were used to deposit and withdraw banknotes. Then ATMs with debit and credit cards entered the scene, and electronic payments quickly followed, removing the need to visit ATMs or even carry cash.
With the banking industry being one of the first to be touched by every wave of digitization, what if the next big development is the implementation of metaverse technology in banking?
Consider entering a bank branch virtually and using customer rep avatars to enter the vault and digitally deposit or withdraw money. Consider being able to pay using dollars in your savings account, a digital currency provided by the bank, or even tokens from a digital wallet such as Ethereum. All of these fantastic hypotheses have the potential to come true in the context of metaverse banking.
In this post, we will look at the commercial opportunities for metaverse in banking, the benefits of metaverse banking, banks that have already joined the field, and how banks can plan their metaverse entry.
To really comprehend the possibilities of metaverse use cases in banking, one must first examine the evolution of banks, which has led them to the point where the industry is now ready to embark on a new chapter.
What caused the banking industry's metaverse to emerge?
At the time of writing, the banking industry had reached the fourth stage of transformation, with NFTs and cryptos taking center stage. At the same time, a few banking institutions have entered the fifth stage, the metaverse.
It was a two-tiered banking phase dominated by central banks and based on one-on-one interactions with customers in a physical environment. The stage was noted for being paper-based and labor-intensive, with a lack of financial product customisation and personalization.
The banking industry's digitalization accelerated throughout the recent decade. It was separated into two stages: one in which current processes were digitised so that they could be accessible via mobile and the internet, and the second in which new customer journeys were created to meet customers' digital-first demand.
Banking is now open
The banking industry has opened up in the last three to five years to be integrated with third-party services via APIs. This has resulted in the establishment of a number of neo-banks and cross-industry marketplace offerings by banks (for example, health services, purchase and sell automotives, energy services, and so on).
Finance banking has been digitised
Blockchain has given rise to a new secure, borderless, and quick banking industry with the introduction of Web3. NFTs and cryptos have played a significant role in this, introducing totally new assets to the financial sector like art, gaming, and real estate.
The advantages of the metaverse in banking
Banking in the metaverse has a number of advantages for the traditional business. Benefits that not only improve the consumer experience but also enable new financing options.
Elevation of current 3D functionalities
With 47% of bankers expecting AR/VR to be an alternative transaction channel by 2030, a handful of banks have begun VR training for their workers. Bank of America, for example, has created a virtual reality training program for its 50,000 workers that simulates real-world client scenarios. Furthermore, BNP Paribas has launched a VR app that allows users to conduct banking transactions using VR.
Enabling 3D staff and customer experiences will enable banks to provide more elevated products, allowing them to interact with a new target group and establish their importance. To summarize, the following are the advantages of employing 3D for banks.
Metaverse banking: Allow consumers to monitor their balance, pay bills, and transfer funds using AR/VR platforms.
Employee experiences: Provide an immersive learning experience for remote workers by simulating client scenarios and onboarding them with a sense of community.
Customer engagement on multiple levels
Banking in the metaverse allows institutions to reconsider how they interact with their consumers and what they might do to provide sympathetic service via avatars. The experience-based response to how the metaverse will impact financial services is twofold:
Personalized connect: In the metaverse, banks can provide high-touch service to consumers by providing them with a virtual view of their portfolio and expense revenue, holding virtual financial planning sessions, and making well-thought-out product recommendations.
Brand Extension: Banks can extend their physical experience in the virtual world by simulating events such as ATM cash withdrawals, branch placement and layout, and so on. Customers would feel more connected to the bank as a result of this.
Banking is about to undergo a never-before-seen digital transformation. The metaverse in fintech is much more than a technological revolution that would open up new revenue streams. It is a platform that banks may use to reconnect with their customers in a new setting and develop emotional, individualized relationships with them.
What banks do now, especially since some of the world's largest institutions have already entered the metaverse, will determine their willingness to embrace digitization. Banks that do not take the lead today will find themselves in the ecosystems of others.
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