The Metaverse And Banking - What Changes Would The New Web Sensation Bring To Banking?
Ever since Mark Zuckerberg changed the name of his company from Facebook to Meta, the word on everyone's lips is "metaverse". Since the announcement, metaverse has witnessed an unprecedented acceleration. According to Goldman Sachs, in the near future, the metaverse will be an $8 trillion industry on the revenue and monetization side.
Sensing the opportunity, banks are also jumping on the bandwagon and have begun exploring metaverse and blockchain technology.
Testing metaverse
JPMorgan claims to be the first bank to set up shop in Decentraland, a virtual world where users can buy digital plots of land. Established by Onyx, the bank's blockchain unit, the “lounge” by JPMorgan has a digital portrait of CEO Jamie Dimon and a roaming tiger.
HSBC Holdings has also recently launched a fund called the Metaverse Discretionary Strategy portfolio that will focus on investing within the metaverse ecosystem.
Similarly, American Express hinted at its metaverse ambitions and is considering providing card payments, ATM services, banking services, and fraud detection to customers in the augmented reality space.
The metaverse has the potential to make huge improvements in the banking sector, changing the way banks engage with their customers, invent products and enable services.
Engaging with customers
The metaverse builds opportunities to reach new audiences, especially a younger, NFT-savvy generation. In the metaverse, customers may visit virtual bank branches, discuss investment plans with an avatar advisor and even take a house tour with a mortgage broker in real-time.
South Korea's Kookmin Bank has already set up consultations between customers and employees through avatars in its virtual bank.
Inventing products
In the burgeoning metaverse economy, banks have the opportunity to lend and insure against cryptocurrency, NFTs and virtual real estate. They can also engage in creating virtual customer interactions such as cash withdrawals from virtual ATMs.
Engaging in 3D
The metaverse could help banks attract new customers who have otherwise been averse to traditional banking systems. With banks giving customers the opportunity to avail financial products and services in an online virtual space from the comfort of their homes, banks are likely to attract a new generation of users.
