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In the last year, we have seen tech giants like Meta, Microsoft, Tencent, and more make big moves in the metaverse space. Lately, this new phase of the internet is attracting attention from banks. Metaverse for banking means transforming the current day online banking experience to a virtual space in metaverse that would render an experience of walking into a physical bank.
Today’s digital banking is fully functional but it is an emotionally devoid space. Banking in the metaverse will enable people to move beyond web browsing banking. It will be built on technologies like AR (augmented reality), VR (virtual reality), and blockchain, and it will enable people to virtually meet and interact with banks.
What kind of banking services will the metaverse enable?
According to Goldman Sachs and Morgan Stanley, the metaverse economy would grow to be a USD 8 trillion economy. It is expected that a good share of this economy will be contributed by banks and banking customers.
- Immersive customer and employee experiences
- Customer Engagement
- Banking brand extension
- Digital asset management
Metaverse development for banking will use technologies like AR, VR, and blockchain technology to enable 3D customer and employee experiences. The customers will be able to connect with employees on virtual kiosks, check balances, pay bills and make transfers. These simulated customer experiences will deliver an immersive learning experience to remote bank workers also.
Metaverse for banking will connect customers to employees to avail personalized advice. Both customers and employees will have their virtual avatar in a banking metaverse. AR/VR technology can serve customers looking for sophisticated products, including financial planning sessions and mortgages.
With metaverse, banks can virtualize brand interactions for customers like cash withdrawal from ATMs, placements of branches, and endorsements. It will also bring social and governance credentials to life for customers.
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 NFTs. This can be enabled by recreating a virtual twin for the crypto asset.
How have some big banks started to explore the metaverse?
Some of the very big names have already started to explore metaverse development:
- JP Morgan
- HSBC
- Standard Chartered
JP Morgan has been one of the biggest proponents of blockchain and its uses in banking. That is why JP Morgan jumping into the metaverse was pretty obvious.
In 2022, JP Morgan acquired space in a virtual commercial space in Decentraland. At present, if you visit JP Morgan in Decentraland, you will be greeted by a tiger and a smiling portrait of the JP Morgan CEO. In the future, JP Morgan plans to bring business opportunities worth over $1,000 billion to the metaverse.
HSBC acquired a virtual land in The Sandbox in 2022. At present, this virtual space only showcases a video that shows that HSBC has occupied this land.
In May 2022, Standard Chartered announced that it invested in a virtual land on Decentraland. However, no development effort has been put into it as of now.
All these banks are trying to be a part of the expanding economy in the metaverse. There is an untapped source of growth where banks can offer services like insurance and lending against cryptocurrencies, non-fungible tokens (NFTs), and virtual real estate. It is totally a bank’s choice what role they will play and how they will leverage the metaverse to expand their presence in the market.
Are there any risks associated with metaverse banking?
Metaverse for banking would transform the entire playground and could expose banks to reputational and legal risks. Therefore, banks must adopt a high level of scrutiny mechanisms before they indulge in metaverse-enabled services.
Wrapping it up
Over time, we might see traditional banking and crypto banking merge together and offer a next-level banking experience to users. To project ahead of others in the space, banking in metaverse will become a stepping stone.
At Antier Solutions, we help build solutions and services on cutting-edge blockchain technology. Whether you want to create your metaverse experience for banking or for any other industry, like real estate, entertainment, social media, fashion, or more, we help you accomplish your business goals with our customized metaverse development solutions.
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