The digital world is moving rapidly towards the age of the metaverse that led individuals to live their real lives in connected, persistent virtual realities. The metaverse is the next-gen world evolving in society and provides an innovative way for customers to interact with the emerging virtual technologies.
The customer expectations and demands are increasing yearly, and so are the technological possibilities to meet and satisfy user expectations. Anything you do in the real world will have the same impact in the metaverse world.
The global metaverse market is expected to reach $1,527.55 billion by 2029 from $100.27 billion in 2022, at a CAGR of 47.6%. This incremental growth leads to a surge in the adoption of online video gaming and consumer preferences for online shopping.
The economic value of the metaverse is rising exponentially, offering banks the opportunity to insure and lend against cryptocurrencies, non-fungible tokens (NFTs), and virtual real estate. It urges banks to invest in the metaverse development infrastructure using its applications.
It’s time for bank institutions to leverage this opportunity to expand their brand by applying metaverse into their business processes. In this article, we will discuss the scope of the metaverse in the banking industry and how this emerging tech will change how banks interact and innovate. So, without further ado, let’s get started!
6 ways Metaverse can transform the banking sector
The metaverse isn’t just the latest buzzword of the software industry but a consistent and persistent reality. Here are several ways to make you understand how metaverse is transforming the banking sector.
1. Origin of a new market
Digital assets today have emerged like a flood from the crypto community, and they are now well traded and valued in the market dealing in virtual currencies.
Now, real money is invested in acquiring virtual assets.
Individuals and even banks can now virtualize customer interactions such as cash withdrawals from virtual ATMs and branches and receive actual sponsorships for virtual events with the help of metaverse. People can now easily walk out of an appointment with their avatar advisor to an ATM and enter their PIN to get funds into their virtual wallet.
2. Leverage you with a competitive edge
Financial institutions are experiencing the metaverse capabilities that are just the tip of the iceberg. It has the power to have a complete transformation in the way we do bank transactions.
The metaverse provides immense opportunity to the traditional banks to compete against the banks and help them recover lost grounds around WhatsApp payments or embedded finance.
Many people are now exploring the metaverse to invest time and make the right purchasing decisions. This is the right time when financial institutions need to develop establishments for these transactions, for instance, allowing fiat currency conversion into metaverse’s cryptocurrency or extending loans.
3. Explore the NFT opportunity
Many professionals today are making transactions in the virtual reality space and investing in NFTs. It acts as a bridge between users and the metaverse that helps them give great social experiences while being a part of bigger community.
They should also identify ownership of digital products only in virtual reality. For bank institutions, NFTs could become an asset in wealth management. They have the opportunity to move one step ahead and launch mutual funds of NFTs, where the investment may surge.
4. Deliver immersive experience to boost customer engagement
For traditional customers who still choose to visit a bank branch, banks now offer an immersive and round-the-clock banking experience in the metaverse.
Not all banks have the potential to jump into the metaverse completely; financial institutions can come all together on the cloud and share resources. For example, the voice-based call centers for customers’ grievance redressal may soon make a path for metaverse avatars of bank professionals.
This gives customers a 360-degree impression without waiting in a queue at the bank or on a call with the relationship manager. Now, customers can have personalized chats with the bank personnel and offer access to all services provided by the bank.
5. Prepare for new-age lending
In this new lending age, banking transactions in the metaverse need a secure way to commit. Financial institutions are not benefitted and can predefine, develop and implement solutions that will serve all the crypto transaction and investment needs. This certainly depends on multiple factors, including government regulations and a secure system.
At this stage, decentralized finance and Web 3.0 will help decentralize data. In contrast, blockchain technology permits individuals full rights over their data. With this, fewer intermediaries will be involved in transactions, and the cost of transactions will also slow down.
It provides banks a more collaborative peer-to-peer lending and direct purchase and sale between two parties using blockchain and cryptocurrency technology.
6. The advent of new products
Today, banks are already targeting NFT-savvy individuals, but roles will still shift in the metaverse universe regarding marketing.
Marketing connection with customers will now transition from defining to partnering as people become collaborators in the world.
Banks must discover new ways to establish trust in the metaverse. Banks must find new ways to develop trust in the metaverse. Metaverse applications offer exciting potential for banks.
In a Nutshell
Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social, and entertainment. Hence, it will enhance the immersive experience and leave no stone unturned with metaverse to entice more people every year.
However, in every sector, wherever there are exchanges of goods and services, even in virtual worlds, there will always be immense opportunities for banking services. Financial institutions must get their ecosystem to provide services on this platform. As transactions are already happening on the metaverse, financial institutions must ensure their involvement.
While metaverse also needs standards and guidelines to meet the banking and financial expectations to provide value to the customers using it.