The metaverse gives the banking sector the opportunity to improve on its products, services, and client experiences.
Estimated to become an $800 billion market, the metaverse is a new piece of technology that promises exciting new possibilities and massive user experiences.
A wide range of industries have keyed into this technology including the gaming, fashion, agriculture, architecture, engineering and entertainment industries. These industries have been transformed and the banking sector should not be left out of this transformation as the metaverse can offer the sector a lot of development.
The banking sector has moved from the traditional banking sector to a digitised banking system in which systems like mobile applications for banking transactions have been introduced.
The traditional banking structure required one-on-one customer interaction. It was manual and paper-based, with a lack of individualized and customized services.
However, the digital banking paradigm emerged to replace the established traditional financial system and now the banking sector has moved from manual and paper-based services to Cloud-based services. The process of the banking sector has now been digitized.
With the introduction of the metaverse to the banking industry, the range of services offered to clients is expanded.
This article seeks to explain how the metaverse could improve the banking sector.
What is the metaverse?
The metaverse is a highly interactive three-dimensional virtual world of the Internet.
Novelist Neal Stephenson first used the term “metaverse” in his science fiction book Snow Crash in 1992. According to Stephenson’s description in his book, it is a vast digital universe that exists parallel to the real world.
How the metaverse would improve the banking system
Although most banks have embraced the digital part of technology where they offer most of their services online without going to the bank branch, the potential of the introduction of the metaverse to the banking sector is not limited as it offers the banking sector the chance to reintroduce humanity into banking.
The Metaverse can improve the banking sector through:
- Advanced virtual banking services
- Improved customer experiences and interaction
- Unconstrained banking operations
- Introduction of new products and services
Advanced virtual banking services
The metaverse gives the banking sector the capacity to overlay a wide range of information that would not necessarily fit on a mobile device or computer screen. Augmented reality and Virtual reality are used to simulate financial scenarios so that customers can easily visualize them.
With the metaverse offering augmented reality (AR) and Virtual reality (VR), the customer feels as though he is in the environment of the banking sector and he can perform almost all the transactions the banking sector offers. As a result, new mobile banking tools will be added to current ones, such as those that display consumers’ account balances or use augmented reality to lead them to nearby bank branches.
Some common forms of virtual banking are the use of magnetic ink character recognition code (MICR), Electronic clearing service scheme, electronic fund transfer scheme, Real-time gross settlement (RTGS), computerized settlement of clearing transactions, and centralized fund management schemes. With Ar and Vr technology, customers can pay bills online, check account details, secure loans, and withdraw and deposit money anytime.
Improved customer experiences and interaction
The metaverse would allow financial centers the opportunity to build and deepen connections with clients. The metaverse could be a tool to help financial systems provide the crucial human touch, which would strengthen the bonds between clients and institutions.
The client’s experience is important in the metaverse. Banks can give their clients a realistic and engaging atmosphere. Without having to wait in line at the physical bank or call a customer care representative, customers can receive a 360-degree perspective. Voice-based contact centers for customer complaints could replace bank staff metaverse avatars.
Customers will be able to engage with bank staff, receive guidance on financial institutions or products and the bank would be able to offer empathetic listening and response.
Customer interaction would be positively affected by the metaverse as customers can interact with their banks in several different ways in the metaverse.
Banks can relate to their customers by offering tailored advice, compassionate support, and building trust.
Financial Guidance is also personalized as banks could provide clients with high-touch service and individualized financial advice through yearly virtual portfolio reviews, financial planning sessions, and product recommendations.
Unconstrained banking operations
This is where metaverse virtual reality (VR) shines; it takes both banking officials and clients to a different environment and gives them the impression that they are physically present in the bank.
The world took working remotely more seriously in 2020 when the Covid 19 pandemic took over the world. Many countries were on lockdown and because transactions had to go on, remote working was introduced by most sectors and industries.
The metaverse offers the banking sector the opportunity to have unconstrained banking operations. Banking operations can be done from any part of the world at any given time. It favors not just the customers performing transactions remotely but also the workers continuing the operations of the bank. With the metaverse, there is no break in transactions as operations are not restricted or limited to the physical building of the banks.
For bank workers, they can effectively work remotely as Virtual reality (VR) facilitates better communication through teleconferencing where they use screen-sharing, chat, and annotation features to work productively apart from one another. The metaverse creates excellent employee experiences whereby remote workers could familiarize themselves with banking systems in ways that encourage fun, connection, and a sense of community.
With the metaverse, they can provide a digital banking experience to the customers that are not limited by established time zones, geographic limits, or even regulatory limits. From the little corner of their room, the customer can feel as though he is in the environment of the banking sector.
Introduction of new products and services
Millions of dollars are being invested in virtual experiences and the banking sector has the opportunity to benefit from the thriving metaverse economy.
Increased investment and other underlying financial operations in the metaverse can result in the establishment of new jobs, products, and services which in turn helps the financial sector to grow as a whole.
The metaverse offers banks the capability to enable loans, investments, insurance, and payments in the metaverse economy.
The banking sectors could introduce new forms of digital payments for metaverse commodities, services, and economies enabled by secure wallet functionality and payment rails.
Banks may also extend their role as custodians of clients’ assets to the metaverse by safeguarding, insuring, and lending cryptocurrencies, NFTs, and virtual properties.
It could also be employed by the banking sector in data visualization, to help them analyze financial risks and give consumers more accurate services.
Conclusion
There are tons of possibilities in the metaverse and as other sectors are keying into these opportunities the banking sector should not be left out of this technological advancement. The banking sector should see the value of adopting the new age of technology.
The introduction of the metaverse to the banking sector benefits not just the customers but the banks also.
The metaverse provides the banks with advanced virtual banking services. Although most banks have adopted digital systems like mobile apps, the digital technologies could be improved on by the metaverse providing a better experience for the bank and the customers.
