Companies are increasingly investing in the metaverse, which Gartner describes as “a collective, virtual shared space, created by the convergence of virtually enhanced physical and digital reality.” Metaverse is where the real world and virtual world collide, a mashup of technologies like augmented reality (AR), virtual reality (VR), blockchain, artificial intelligence (AI), and machine learning (ML), creating a digital experience that mirrors real life. It’s essentially the next evolution of the internet, with avatars and 3D, connected experiences.
When it comes to financial services and the metaverse, the time is now to prepare for adoption in this industry.
Metaverse is gathering steam
The global health pandemic accelerated the adoption and advancement of technologies such as blockchain, cryptocurrencies and NFTs, and AR/VR, which are crucial metaverse building blocks.
Gaming, in particular, has served as a gateway to the metaverse, opening new doors and experiences and revealing exciting possibilities. For example, Epic Games found that Fortnite players often socialize with their friends inside the gaming platform even after a game ends, providing opportunities for virtual events, such as when Ariana Grande stepped into Fortnite to deliver a virtual concert in 2021.
Major brands are also betting big on the metaverse. Most notably, Facebook rebranded itself as Meta and unveiled plans to build a metaverse. Other brands like Samsung and Adidas are purchasing “real estate” in metaverse platforms such as Sandbox and Decentraland, paying up to $2.4 million for digital property and renting land for up to $60,000 a month.
These brands are building experiences to engage with the estimated 2.4 billion people who will visit the metaverse by 2026. The global metaverse market is expected to balloon to $947 billion by 2030.
Use cases for financial services and the metaverse
But what does the metaverse mean for the financial services industry? Below are some compelling use cases awaiting financial services companies in the metaverse.
Enabling digital transactions is the most obvious use case. For example, American Express is already investing in the metaverse, with plans to allow customers to use AmEx payments in virtual worlds.
Furthermore, cryptocurrencies are on the rise, with an increasing number of countries recognizing crypto as a legal tender. Simple and secure crypto transactions will likely form the foundation of the metaverse economy. In fact, AmEx is also eyeing services like crypto management and trading.
Consumer banking experiences
While consumer banking used to be primarily in person, these days, many consumers never set foot in their bank. While convenient, these online experiences can be highly impersonal.
The metaverse provides an opportunity to humanize consumer banking, offering a virtual destination where consumers can interact and ask questions, whether they’re applying for loans or opening accounts. The metaverse also provides the opportunity to expand products and services. Already, some digital-only banks connect customers to third-party services and cross-industry marketplaces.
Robo-advisory investment banking
Robo-advisors have been around for a while. But in the metaverse, robo-advisory services will be up-leveled with more personalized, interactive experiences. Robo-advisors in the metaverse will be able to talk to consumers and answer questions, providing a more human-like experience.
Virtual meetings and onboarding
The metaverse promises new shared spaces and immersive experiences, changing how people interact. Virtual meetings and events will become more immersive, enabling people to move freely and interact in any language. The metaverse also impacts onboarding, providing more personalized, engaging learning experiences that improve knowledge retention.
Preparing for a metaverse future
The metaverse is a journey. While no one knows exactly what the destination looks like or when we’ll arrive, we know that the metaverse is our future.
The first step in preparing for the metaverse is digital transformation. Financial institutions must accelerate digital transformation initiatives and identify use cases across the different layers of the metaverse framework, including experience (dematerialization of physical objects), discovery (inquiring for information), the marketplace and meta-economy, spatial computing (bringing life to metaverse), and the human interface to the virtual world.
We already know many of the building blocks needed to realize this future, and it behooves financial institutions to build foundational competency in AI, ML, blockchain, cryptocurrencies and NFTs, and AR/VR technologies.
Financial institutions must also begin thinking about how to design personalized and relevant experiences and reimagine their products and services for a metaverse future.
Beyondsoft helps customers around the world accelerate digital transformation and prepare for success in the metaverse. We work with customers to perform initial discovery and design, identify required technologies, and build a technology roadmap. To learn more about how we can help your financial institution prepare for the metaverse, reach out to our experts.