More and more ways to use the metaverse are being thought up. At first, it was meant to be a virtual place where people could work from home, but now it seems like gaming is the main focus. But products from other industries are also being made to be part of the metaverse.

 

The next big thing to happen in the metaverse is now the rise of banking. Accenture says in an article that banks in the metaverse are in the best position to help the economy of the metaverse grow. At a time when banking has become a business, banks might deliver advice and establish relationships by using Augmented Reality and Virtual Reality

How is Technology Influencing the Future of Banks via the Metaverse?

In the past, banknotes were deposited and withdrawn from banks. The introduction of ATMs with debit and credit cards, followed by electronic payments, eliminated the need to visit ATMs and even carry cash.

 

Given that the banking industry is one of the key industries affected by each wave of digitization, what if the next change is the introduction of metaverse technology in the banking industry?

 

Imagine virtually entering a bank branch with the assistance of customer service representative avatars to access the vault and digitally deposit or withdraw money. Imagine having the option to pay with dollars from your savings account, a digital currency provided by your bank, or even tokens from your Ethereum-based digital wallet. All of these far-fetched hypotheses have the potential to be realized in the metaverse’s banking system.

 

This article will discuss the business opportunities for the metaverse in banking, the benefits of metaverse banking, the banks that have already entered the field, and how banks should plan their entry into the metaverse.

How did the metaverse come to be in the banking business?

At the time this article was written, the banking industry had moved into its fourth stage of metaverse development services, with NFTs and cryptocurrencies taking the lead. At the same time, a few banks have moved on to the fifth stage, which is called the metaverse.

Traditional banking

 

It was a time when banks had two levels, and customers had to meet with bank employees in person. Central banks ran this time. The stage was known for being based on paper and requiring a lot of manual work. Financial products were not personalized or customized.

 

Internet banking

 

In the last ten years, digitalization has become a big part of the banking business. It was split into two parts. In the first, the existing processes were made digital so that they could be accessed through mobile and the internet. In the second, new customer journeys were made to meet the needs of customers who wanted to use digital first.

 

Open banking

 

In the last three to five years, APIs have made it possible for third-party services to connect with banks. This has led to the creation of a number of neo-banks, which are cross-industry marketplaces that banks offer (such as health services, buy and sell autos, energy services, etc.).

 

Digitized banking and finance

 

With the rise of Web3, blockchain technology has given rise to a new banking economy that is fast, safe, and doesn’t have borders. NFTs and cryptocurrencies, which have brought art, games, and real estate, among other things, to the financial market, play a big part in this.

The chance for banks in the metaverse

Morgan Stanley and Goldman Sachs found that in the future, the metaverse domain could be worth as much as $8 trillion. In this way of figuring out the value of the market, banks are very important. Banks will be able to rethink how they interact with their customers and what they offer by using AR/VR and cryptocurrencies.

 

Even though the technology has a lot of potential for the banking industry because it can solve many of the problems that customers have, the banks that are already using it are still finding their place. Let me explain by giving you some examples of how banks are already using the metaverse.

 

JP Morgan has opened an Onyx lounge in the Decentraland metaverse, where they help with cross-border payments, the creation, storage, and trading of financial assets.

 

HSBC has put money into a plot at The Sandbox metaverse that will be used to connect with gamers and fans of esports.

 

Standard Chartered: The bank has also bought land in The Sandbox, which it plans to use to try out new things and make new experiences for clients in the metaverse.

 

Siam Commercial Bank is the first bank to build its main office in The Sandbox. There are three areas in the space: a) A virtual hub is a place where people can meet up and share information. b) Virtual land: A place where businesses that work together on projects can meet to talk about them. c) Hub: Through the NFT gallery, NFT marketplace, and virtual concerts, it helps promote local artists.

 

Even though these are some of the most well-known banks in the metaverse, more and more banks are getting into the field as we talk about this revolution.

Parting notes

 

The banking industry is on the verge of unprecedented digital change. Metaverse in fintech is significantly more than a technology shift that would generate new revenue streams. It is a platform that banks may use to reconnect with their customers in a new space and develop emotional, individualized relationships with them.

 

What banks do now, particularly in light of the fact that several of the world’s biggest institutions have already entered the metaverse, will determine their receptivity to digitalization. Banks that do not assume leadership position today will find a place in the ecosystems of others.

 

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