While you view it, the internet is undergoing a transformation, which is already having an effect on the financial industry. The Metaverse is the first time that we have seen a subject expand nearly the way it has. Even while technology for extended reality has been there for quite some time, interest in the subject has lately picked up steam, and some experts are projecting that the possibility presented by the Metaverse will be worth $8 trillion. As a result of the epidemic, an increasing number of individuals are using online banking, which has contributed to the industry's skyrocketing growth, which will result in worldwide revenue of $154 billion in 2021. We do not know how quickly the Metaverse will grow beyond gaming; however, we know that the next boundary will soon arrive, and the fear of missing out (FOMO) among financial institutions is bigger than it has ever been.

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The manner in which banks interact with their clients, create fresh products, as well as allow services may be influenced by the metaverse. Getting your first bank account, whether it was a checking, savings, or credit card, was likely the beginning of a lifelong relationship. If you were to ask a future generation about banking, what would be their first memory, what would come to mind? Distressingly, the days of deep, meaningful conversations are dwindling away. When continuous digital worlds and augmented reality meet, they form what is known as the "Metaverse," a communal virtual shared place accessible to everybody. Blending AR, VR, as well as the Web.

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We're becoming more and more pumped up about the possibility of the Metaverse the more we discuss it with financial institutions or banks. Even if the new business climate might appear confusing, banks must take into account the opportunities it presents for the evolution of their operations at every level. When it comes to the Metaverse, it's crucial for financial institutions to find a happy medium between rigid regulations and a healthy dose of curiosity.

Conventional Mode v/s Metaverse

Currency deposits and withdrawals were processed through bank teller windows. Then, when credit and debit cards were developed, people no longer needed to retrieve as well as carry money around thanks to the convenience of Automated Teller Machines. With the advent of electronic payments, a physical card is no longer necessary. Mobile devices are increasingly being used for scanning and making purchases. Bank transfers, Google Wallet, Paytm, PhonePe, etc., are all acceptable ways of payment. Financial institutions in the Metaverse may now lend and insure against virtual money, NFTs, and digital real estate, all of which are essential to the development of the rapidly expanding Metaverse economy. Additionally, they may mimic real-world customer interactions, such as making a simulated ATM withdrawal. Financial services will be needed in the virtual world where individuals may buy, sell, and lease digital goods.

How it Enables your Existing Functionality in 3D?

The financial sector was slow to adopt the internet, with the process taking between 15 and 20 years. It only took around six years for the smartphone to be developed. As we progress from two-dimensional to three-dimensional, we'll be able to create huge universes in which users may fully involve themselves. Financial institutions should think about the technological possibilities of 3D banking. Given that 47% of bankers anticipate that clients will use AR/VR as an additional channel for transactions by the year 2030, it's not surprising to witness initial market adventurers testing the waters in this region. Whereas Citi has tried holographic workstations for financial trading, BNP Paribas has developed a virtual reality software that enables clients to utilize Virtual Reality in banking processes, including account opening. Banks that want to stay competitive in the future of the Metaverse will need to enable 3D consumer and staff experiences soon.

Global Surveys Forecast for the Metaverse Economy

The Accenture Technology Vision study for 2022 found that 38% of global banking executives see the metaverse as a pioneering or transformative technology that would have a favorable influence on their organizations. According to the survey, over 92% of people believe that the next generation of electronic technologies must offer integrated experiences that enable consumers' information to be shared beyond platforms as well as locations. It has been estimated by financial giants Goldman Sachs und Morgan Stanley that the Metaverse industry could be valued as much as $8 trillion. Financial institutions are one of the best positioned organizations to fulfill the rising demand for Metaverse-native virtual money and identity.

How to Engage with your Customers with Meaningful New Ways?

Banks are now well equipped to do their jobs, yet they frequently lack empathy. Ironically, the metaverse presents a unique opportunity for financial institutions to reconnect with their consumers on a more personal level. Reaching new viewers, such as the current generation of NFT users, is also made easier thanks to the metaverse. For this demographic, financial institutions will need to rethink their outreach strategies. We three kids are reminded of our parents taking us to a branch to have our bank books certified.

The Bottomline

Metaverse may increase banks' client engagement, product development, as well as service delivery. Historically, individuals traded goods and services for money. The future depends on how effectively bankers, developers, as well as security experts can create a distinctive client experience whilst avoiding theft and resolving data protection and privacy issues. Future generations will play in Metaverse. The goal shall be to exploit its distinctive qualities to develop a genuinely realistic customer experience for virtual bank clients.

Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.