Have you ever felt excited to visit your local bank? Maybe a long time ago or maybe never, might be your answer. Long queues, delayed customer support, and never-ending application forms at local banks have made most of us feel this way.
What if we told you that by wearing a pair of virtual reality glasses, you could meet a banker, speak to an investment manager about managing your funds and get other personalized products from your local bank? Isn’t it exciting? This is how Metaverse makes Virtual Banking a reality by integrating with current banking services.
We will discuss the fusion of Metaverse and banking as creating an intriguing ecosystem enabling wider participation. We will also examine the current state of banking in this article.
Traditional Banking
Preceding the information technology revolution, banks used to work on a pen and paper model. Customers had to visit the bank at all times during this time. The IT revolution produced a large-scale expansion of baking services at the turn of the 21st century. This was also the first time data became fundamental when it came to making banking decisions for first-time bankers.
Customers were able to access banking services through their mobile phones because of reduced data rates leading to an increase in mobile usage. The birth of Fin-tech is the consequence of the high growth in the banking sector. Advancements in innovation have reduced the time needed to complete basic banking activities.
Complex banking processes are carried out at the click of a button, but they have become transactional without any emotional quotient. Additionally, centralized authorities control customers’ funds in the current banking model. The risk of funds being compromised increases with centralization.
The Metaverse can provide a much more decentralized and interactive solution to fill the gaps in the current banking system.
The Future of Banking
The Metaverse ecosystem is a key part of Web 3.0 technology and is the next step in the internet’s evolution. The user experience will become more immersive because of the ability of the Metaverse to combine the concepts of AI, Machine Learning, Blockchain, AR, and VR. Users can buy, sell, play, and even make use of banking services in the interactive virtual world of the Metaverse.
Analysts predict that the Metaverse economy is set to boom in future years, and there are compelling reasons behind this calculated assumption.
A Reduction in Technological Costs:
The cost of producing virtual and augmented reality equipment is reducing as hardware manufacturers are producing economies of scale. The price of a high-quality Oculus VR headset has come down to below $100 from roughly $600 after Facebook acquired Oculus. Dropping prices are making technology accessible to the masses, and this will only benefit the banking industry.
Changes in Banking Experience:
The current banking experience is transactional. The Metaverse promises a much more stimulating experience. The feeling of entering a virtual world can only be experienced while playing a game or watching a movie. But the Metaverse will enable us to perform routine day-to-day activities in a virtual world.
Wider Access to Talent and Customers:
Physical borders are limiting banking operations. Banking workspaces are only set up in areas where they intend to provide banking services and solutions. Banks can potentially have access to talent and customers from all over the world with the support of the Metaverse.
Imagine an Indian bank has a customer relationship manager in Canada who is assisting a customer in the Maldives via the Metaverse.
A Branding Arm for Banks:
Banks can pave the way and grab customers’ attention by being an early mover in this space. It is also a great way to position the brand to appeal to today’s youth by adopting the latest technologies.
Banks that position themselves can create a strong brand recall with the youth, who are very interested in Cryptos, Metaverse, and NFTs.
Leading adopters of Virtual Banks:
Bank of America, HSBC, BNB Paribas, and JP Morgan are currently making big gains in this space. A virtual space called Onyx in Decentraland was set up by JP Morgan. HSBC is investing in a piece of land in the Sandbox Metaverse. Customers can access their account information in the virtual bank created by BNB Paribas.
More banks are set to follow once the adoption of Metaverse picks up pace.
Final Thoughts
The future of banking is being shaped by the Metaverse. According to an Accenture report, roughly 70% of bankers believe that VR services could be big differentiators for banks.
Banks can earn a competitive edge by adopting this new age version of banking, and the Metaverse will reduce the restrictions or issues in today’s banking system. You could find yourself wearing a pair of flashy VR goggles and visiting a virtual bank very soon.
