The Metaverse is the next iteration of the digital society, an innovative way for customers to interact with emerging technologies. Although it is still very nascent for the banking sector without significant impact, it will be managed by digital currencies for better customer experience through collaborations such as the Metaverse Alliance, graphics and 5G. Recently, Korean banks said they have already created a “virtual city” on a metaverse platform this year, and other banks intend to follow this example and set up virtual branches.
Customer expectations and demands increase every year, as do the technological possibilities to meet and satisfy these expectations. The integration of digital technologies in the banking sector has been an impetus to offer customers a new type of experience. Now the question for banks is what is their role in the metaverse?
Banking in the metaverse – a technological shift for finance
The more we discuss the metaverse in banking, the more we know about its potential. As remarkable as this new change may seem, banks must consider these opportunities to change everything for the future of business.
A bank can, in the metaverse, allow its customers to move into their own virtual financial city for the customer with a virtual branch and financial playground and provide a “telecommuting” center for staff. Customers walking into the virtual branch may be able to interact with the content and an actual agent through a video call.
Banking in the Metaverse will involve a technological shift and include a new phase of interconnected virtual experiences using technologies such as virtual and augmented reality.
How consumers will benefit from banking services in the metaverse
The ability to manage finances and transactions in this new environment will be key to making it as immersive and comparable, if not better than in real life.
The metaverse offers banks a much-needed avenue to bring humanity/experience back into banking and increase connections with current customers by bringing them together in more meaningful ways.
The metaverse also creates new opportunities to reach new audiences, including a younger and more experienced generation of NFTs, such as customers visiting virtual branches for top-notch customer service, having a home visit with a broker in real-time mortgages, discuss retirement plans with an avatar advisor, attend an investor event or a bank-sponsored community program.
Ease of banking in the metaverse
Cryptocurrency enables financial transactions in the virtual world and transactions are done instantly and securely with the blockchain technology behind the cryptocurrency. The metaverse even goes beyond blockchain and cryptocurrencies. Metaverse wallets and virtual assistants could become the new order of the day.
A financial transaction in the metaverse and the physical world transaction are pretty much the same.
Originating from the crypto community, digital assets are now traded and rated on a marketplace. In other words, people are already spending real money to own virtual assets and they are ready to spend their virtual money in the real world.
Fintechs and Digital First Banks Will Play a Key Role in Metaverse Banking
Fintech innovation has facilitated access to online financial services. Since fintechs are digitally-based, they are more likely to play a definitive role in banking in the metaverse, positioning themselves more as the future of finance, much like the first digital banks.
As the metaverse expands, people would like to spend more time in the “real” world. Similarly, fintechs work harder and give their all when it comes to providing payment processing services, auto loans, and home loans.
Just like in the real world, financial services are becoming increasingly competitive within the metaverse, and fintech will not only play a role, but also help shape the entire business environment within these parallel worlds.
It remains to be seen to what extent the paradigm shift will occur in financial services and which potential customers will embrace this new form of banking. As legacy banking is still in various stages of digitization with AI and ML, the impact banking in the metaverse will have on the industry is, for now, a billion dollar question, as it is still in its infancy.
The author is Founder and CEO, LUMIQ