Understanding the role of banking in the metaverse

Once part of a 90s science-fiction novel, banking in the metaverse as a term grew to become a modern-day disruptive phenomenon already adopted by tech giants such as Microsoft, Tencent, NVIDIA, and Facebook. The internet as we know is evolving and soon enough it might transition into a persistent 3D realm.

Underneath the experience of living in a fully digitized world but being totally present, the advanced technologies of the next generation have viable chances of generating trust, scarcity, and ultimately, worldwide adoption. What role does the banking system play in the metaverse? Read on to find out.

Understanding the potential of digital banking in the metaverse

Banking in the metaverse has always been an emotionally detached industry due to the numerous policies and legacy systems set in place. Although the advent of technology has enabled financial institutions to provide customer-oriented services and products, it seems that today’s modern customer expects more. Digitalization comes at a cost, and in banking, this usually means losing that connection people once had with their banking officials.

Over the years, people have lost faith in the system, many of them turning to neobanks and cryptocurrency to get their needs met. Leaving aside the innovative aspect, the metaverse can become a next-generation type of market for the digital banking industry. Morgan Stanley and Goldman Sachs have predicted that the metaverse economy will soon be worth $8 trillion. Banks could reap tremendous benefits if they choose to respond to the increasing demand for digital currencies, transparency, identity, and trust in the metaverse.

The metaverse is an opportunity to build authentic customer relationships

With the help of the metaverse, financial institutions can strengthen customer relationships. Banking in the metaverse officials could use it to strategize better and bring back the human element when conducting conversations. Nearly 47% of modern bankers agree that modern customers will adopt VR/AR technologies as a primary channel for making transactions.

In many ways, the metaverse development company can reinvent the way banks connect with their target audience. Customized advice, trust, and empathetic services are just some of the benefits of the metaverse for the banking sector. For open-minded executives, it is an opportunity to provide high-end services to customers seeking sophisticated, high-end products.

Building a collaborative environment with a sense of community

The metaverse unifies both spaces and people, both in the real and in the virtual world. For banks, it’s a chance to build customer engagement and create communities where people can stay connected on a deeper level. By making banking in the metaverse experiences feel present via real-time avatars, customers could be more open to speaking their minds as opposed to basic video calls or chats. To create real engagement and fortify trust, banks will have to do more than just transition into the metaverse. They will have to work on being more transparent with their offerings, as well as clearly state both objectives and intentions.

Use cases – banks in the metaverse

Modern banks have gotten extremely interested in how the metaverse can help them scale. A 2022 survey done by Accenture points out that nearly 67% of banking in the metaverse executives agree that the metaverse will positively impact the financial sector. Also, 38% said that the metaverse is a transformational or groundbreaking technological phenomenon. Given the potential it can provide, early adopters are already acknowledging the versatility of the metaverse.

South Korean bank, Kookmin, is one of the first in the world to provide access to customized financial information, as well as one-on-one advice to its customers via VR technology. US-based JP Morgan, recently opened Onyx lounge, a virtual space in Decentraland, a blockchain-based metaverse platform. On the other hand, HSBC has opted to invest in virtual land on Sandbox, yet another blockchain development company using the metaverse platform. According to HSBC officials, the partnership will enable them to build an innovative brand image for potential and current customers.

For the banking in the metaverse, industry to have a chance at real digital transformation, transitioning to a metaverse environment seems like a one-of-a-kind opportunity. Sooner or later it will change the way banking officials connect with customers, and there’s no doubt that banking in the metaverse will compel business leaders to rethink and adapt their business models to preserve their competitive advantage.