Over the past year, numerous tech titans, like Meta, Microsoft, and Tencent, have made significant advancements in the metaverse arena. In recent times, financial institutions have begun to show interest in this newest era of the internet.
When it comes to banking, metaverse accordingly refers to converting the conventional online banking environment into a metaverse-based virtual space that simulates the feeling of physically entering a financial institution.
Digital banking in the modern day is completely functional, yet it is an emotionally sterile environment. Although, people can go beyond web-browsing banking when using the financial system in the metaverse.
It will be constructed using augmented reality (AR), virtual reality (VR), and
technologies. It will allow users to meet and communicate with financial institutions virtually.
What kinds of financial services will be made possible by the metaverse?
Both Goldman Sachs and Morgan Stanley forecast that the economy of the metaverse will one day be worth 8 trillion United States dollars. Financial institutions and their customers would likely contribute a sizeable portion to the growth of this economy.
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Immersive customer and employee interactions
Metaverse development services for banking will use augmented reality, virtual reality, and blockchain technology to provide 3D customer and employee experiences. Customers can use virtual kiosks to communicate with personnel, check balances, pay bills, and make transfers. But, these simulated consumer experiences will also provide remote bank employees with an interactive learning opportunity.
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Customer Involvement
Customers will be connected to employees via the banking metaverse to receive customized guidance. In a banking metaverse, consumers and workers will have a virtual avatar. Also, customers seek sophisticated solutions. For example, financial planning sessions and mortgages can benefit from AR/VR technology.
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Expansion of the banking brand
Banks can use metaverse to virtualize customer-brand interactions, such as cash withdrawal from ATMs, branch positioning, and endorsements. Customers will also be able to see its social and governance credentials.
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Management of digital assets
With the inclusion of crypto assets in the global economy, banks must expand their role and infrastructure into acting as custodians of digital assets. Furthermore, this would imply providing services such as crypto asset security, borrowing, and lending against crypto assets or NFTs. This is accomplished by establishing a virtual twin for the crypto asset.
How have some major banks begun to study the metaverse?
Some of the biggest names have already begun to investigate metaverse development:
- JP Morgan Chase
JP Morgan has been a vocal supporter of blockchain and its applications in banking. That is why JP Morgan’s entry into the metaverse was so evident.
JP Morgan purchased a virtual commercial space in Decentraland in 2022. If you go to JP Morgan in Decentraland right now, you will be greeted by a tiger and a smiling photo of the JP Morgan CEO. JP Morgan intends to introduce over $1,000 billion commercial prospects to the metaverse.
- HSBC
In 2022, HSBC purchased a virtual plot of land in The Sandbox. At the moment, this virtual space merely shows a video of HSBC occupying this land.
- Standard Chartered Bank
Standard Chartered announced its investment in a virtual land on Decentraland in May 2022. However, development efforts have yet to be made.
These banks are attempting to become a part of the metaverse’s developing economy. Although, banks can offer services such as insurance and lending against cryptocurrencies, non-fungible tokens (NFTs), and virtual real estate in an untapped source of growth. It is entirely up to the bank to decide what role it will play and how it will use the metaverse to expand its market presence.
Are there any potential downsides to using the metaverse for banking?
A metaverse for banking would shift the playing field and expose financial institutions to risks related to their reputation and the law. Additionally, before banks engage in activities enabled by the metaverse, they must first implement a high level of inspection procedures.
Wrapping it up
In conclusion, the not-too-distant future, conventional banking and cryptocurrency banking may converge to provide customers with an elevated banking experience. Banking in the metaverse will become a stepping stone for those who want to get ahead of others in the space race. These white-label neo-bank systems and applications enable you to digitally issue branded cards, launch savings and loans, and accept domestic and cross-border money transfers.
At Risingmax Inc., we collaborate with clients to develop innovative solutions and services based on blockchain technology, whether you want to construct a metaverse experience for the banking industry or any other industry, such as real estate, entertainment, social media, fashion, or others. Furthermore, we can help you achieve your business goals by offering customized metaverse development solutions.
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