Tech behemoths like Meta, Microsoft, Tencent, and others have made significant moves in the metaverse market over the past year. Banks are now taking an interest in this new internet phase. The term “metaverse for banking” refers to transforming the current online banking environment into a virtual metaverse environment that would simulate entering a physical bank.
Even though modern digital banking is fully functional, it lacks emotion. People can go beyond web browsing banking by banking in the metaverse. People can meet and interact with banks virtually thanks to blockchain, augmented reality, and virtual reality technologies.
What kind of banking services will the metaverse enable?
According to Goldman Sachs and Morgan Stanley, the metaverse economy would expand to a $8 trillion market. Banks and banking customers are anticipated to contribute a sizable portion of this economy.
Immersive customer and employee experiences
To enable 3D customer and employee experiences, metaverse solution for banking will use technologies like AR, VR, and blockchain technology. Customers can communicate with staff members via virtual kiosks, check balances, make transfers, and pay bills. Remote bank employees will also benefit from this immersive learning opportunity provided by the simulated customer experiences.
Customers and employees will be connected through a banking metaverse solution to provide individualized guidance. In a banking metaverse, both clients and staff will have a digital representation of themselves. For high-end products like mortgages and financial planning sessions, customers can benefit from AR/VR technology.
Banking brand extension
Using metaverse, banks can virtualize customer-brand interactions, such as cash withdrawal from ATMs, branch placement, and endorsements. Additionally, it will make customers aware of social and governance credentials.
Digital asset management
With the global economy starting to include crypto assets, banks need to extend their role and infrastructure to act as custodians of digital assets. This would mean offering services like securing crypto assets, borrowing, and lending against crypto assets or NFT development services. This can be enabled by recreating a virtual twin for the crypto asset.
How have some big banks started to explore the metaverse?
Some very well-known figures have already begun to investigate the development of the metaverse:
The JP Morgan is one of the biggest advocates of blockchain technology and its applications in banking. It entry into the metaverse was, therefore, fairly obvious.
JP Morgan purchased a location in a digital shop in Decentraland in 2022. At the moment, a tiger and a cheerful portrait of JP Morgan CEO will greet you if you visit JP Morgan in Decentraland. If JP Morgan intends to open up over $1 trillion worth of business opportunities in the metaverse in the future.
In 2022, HSBC purchased a digital plot of land in The Sandbox. This virtual space only displays a video demonstrating that HSBC has occupied this territory.
Standard Chartered revealed in May 2022 that it had invested in a digital plot of land on Decentraland. But now, no development work has been done on it.
All of these banks are making an effort to participate in the metaverse’s growing economy. Banks can provide insurance and lending against cryptocurrencies, non-fungible tokens (NFTs), and virtual real estate, representing an untapped growth source. It is entirely up to the bank to decide what part they will play and how they will use the metaverse to increase their market share.
Are there any risks associated with metaverse banking?
The entire playground would change if banking had a metaverse, and banks might be subject to legal and reputational risks. Therefore, before engaging in services enabled by the metaverse, banks must adopt high scrutiny mechanisms.
Wrapping it up
It’s possible that traditional banking and cryptocurrency banking will eventually combine to provide users with a cutting-edge banking experience. Banking in the metaverse will become a stepping stone to project ahead of competitors in the space.
We at RisingMax assist in developing products and services utilizing cutting-edge blockchain technology. Our specialized Metaverse Software Development, assist you in achieving your business objectives, whether you want to develop your metaverse experience for the banking sector or any other industry, including real estate, entertainment, social media, fashion, and more.
To discuss your business needs, contact our subject matter experts.