Consider a virtual world in which individuals live, work, shop, and interact with others from the comfort of their homes. This is alluded to as the metaverse.
Defining the Metaverse
The "metaverse" has been the buzzword of the digital community for the past 12-24 months. While the term has been around for much longer – it was coined in 1992 by Neal Stephenson in his cyberpunk novel Snow Crash – the volume of discussion, speculation, and predictions about the metaverse have exploded in the last year, thanks in large part to Mark Zuckerberg's announcement that his company would transition to becoming a "metaverse company" within the next five years.
The metaverse is believed to be the next stage in the development of the internet. It will manifest itself in a variety of ways, including games, online forums, and business meetings in which individuals cooperate using a digital replica or avatar of themselves. The most important thing to realize about the metaverse is that it is not a single location. People are referring to the future version of the internet as the collection of new digital spaces. The metaverse is home to media firms, music publishers, sportswear brands, and bitcoin analytics tools. Rock stars, rappers, Care Bears, and Smurfs all belong to this category.
The metaverse is becoming increasingly popular in today’s people digital environment. The metaverse enables them to consume, create, and engage with online content. It also can change how people interact with each other and with products online. The metaverse has the potential to be a large virtual place in the real world, including a platform where people may live, work, and play. The emergence of the metaverse has consequences for companies as well. Because of the growth of the metaverse, businesses must learn how to connect with their consumers in both the real and virtual worlds. For firms, this creates both constraints and opportunities.
Metaverse Vs. Virtual Reality: Key Differences
According to Ivan Ivanov, the Director Retail Banking at Bulgarian American Credit Bank, there are various misunderstandings concerning the metaverse. The first is that the metaverse will eventually supplant actual life. The metaverse is not a choice between the virtual and the real. Furthermore, claiming that there are several metaverses is the major point of interest. The metaverse is the desired final state - the perfect merge between the digital and physical worlds.
Both the metaverse and virtual reality are significant technical advances; yet, virtual reality has limitations and can only go so far because it is all about taking a virtual adventure. VR technology advancements can only result in more complex virtual experiences. Finally, it appears that virtual reality is all about simulations and having fun in a limited virtual environment. The metaverse, on the other hand, has no fixed borders since it is the result of several forms of technology, including Augmented and Virtual Reality, among others. It is a full-fledged digital universe in which you have control and may grow.
The Metaverse Ecosystem
Metaverse aspires to alter the way people live in the same manner that the internet did by creating a new internet global infrastructure. It accomplishes this by merging blockchain technology with VR, AR, and AI technologies to provide a platform for virtual world creation. These virtual worlds will be utilized to allow secure and efficient human contact.
The environment of the metaverse is expanding. Many firms, like Facebook, Twitter, Netflix, Google, Microsoft, IBM, Samsung, and Apple, are investing in those layers. Also, the metaverse is not only about games; it began as a gaming platform, which is why it's worth noting that the total number of worldwide games has surpassed 3 billion and continues to climb. This illustrates the metaverse's enormous business potential as a concept, and the estimate for the AR/VR headset is also expected to rise significantly as VR applications expand beyond gaming, educational, industrial, and medical facilities are all available.
It is also appropriate to examine the limits of AR/VR. Despite ongoing technological advancement, humans still experience some pain from wearing VR glasses for a lengthy period and separating the user from their surroundings. Content is a concern on social media sites. Another danger is associated with NFT speculations, forgeries, and metaverse speculation, as seen by soaring real estate values and in certain digital communities.
The variety of shared experiences for metaverse users
Again, this is something that VR headsets allow people to experience. Both virtual reality and the metaverse allow you to share a virtual interactive environment with others, yet the breadth of that virtuality varies greatly. Personal avatars will allow players to engage with one another in virtual worlds. Users will also be able to buy or create digital goods and locations, such as NFTs. Virtual reality is frequently limited to a particular number of individuals, including the player size limitation of a game. In contrast, the metaverse is seen as an open virtual world in which we may all freely roam, enjoy, and connect over the whole internet. Consumers will have access to a common digital area.
Metaverse technology is considered superior to virtual reality. However, virtual reality is practically one of the fundamental parts of metaverse progress. It allows customers to become a part of the metaverse realm. Nonetheless, high-tech VR has limited power, resulting in a restricted number of efficient components.
The metaverse is a massive and quickly increasing virtual environment that is a three-dimensional representation of the internet and the actual virtual world. Users may traverse virtual 3D worlds in the metaverse in the same manner that they can visit various web pages. Most importantly, there is no limit to the metaverse's ability to accommodate sophisticated technology.
Metaverse in Banking
The metaverse has the potential to change many parts of our life – from working, playing, buying, and gaming to social networking and online concert attendance. The metaverse banking industry looks to be the next popular term with the potential to revolutionize fintech.
Metaverse in banking refers to the many banking services available to consumers within the metaverse. It may be thought of as an umbrella terminology for financial operations that allow users to deal in the metaverse. Following online banking, mobile banking, and virtual branches commonly seen in shopping malls, this might be the next technological revolution in the banking business. This virtual world, like the real world, requires financial services that let users exchange, own, or lease digital assets. It enables banks to provide payments, insurance, and loans within the metaverse economy while also changing how consumers perceive and experience banking.
Which Banks and Financial Institutions are Already Entering the Metaverse?
Banking is one of the industries that might meet the rising demand for digitally native currency in the metaverse. Furthermore, the metaverse provides banks with a unique chance to use AR/VR technology to rethink their connections with customers and staff. At a time when banking has become a technical procedure devoid of human emotion, the metaverse enables banks to develop personalized connections and deliver customized advice.
Some early adopters in the banking sector are already investing in and researching the metaverse's prospects. They're experimenting with a wide range of applications, which only serves to highlight the technology's adaptability:
JP Morgan has opened an Onyx lounge in Decentraland, a blockchain-based community. The virtual bank may help with foreign exchange, cross-border payments, trade, safeguarding, and the production of financial assets.
Bank of America provides VR training in about 4300 of its banking centers around the country. The training focuses on educating bank staff on how to do various activities and communicate with customers in a virtual environment.
Quontic Bank, located in New York, also has a virtual outpost in Decentraland, which allows the bank to communicate with customers, educate them about its services, and allow them to utilize those services from the comfort of their own homes.
BNB Paribas has released a virtual reality software that allows retail banking customers to view their account activity and transaction data in a virtual reality environment.
Another bank investing in The Sandbox, a metaverse game platform, is HSBC. It will transform the land into a virtual environment where sports, e-sports, and gaming aficionados may connect.
The Standard Chartered Bank Hong Kong division has collaborated with The Sandbox to build a metaverse experience that "actively engages clients, partners, staff, and the tech community to explore co-creation opportunities in this new and fascinating environment."
In India, Mumbai-based Fintech Kiya.ai has established Kiyaverse, the country's first financial metaverse, to facilitate virtual interactions between banks and non-banking financing organizations. Customers must wear a VR headset to access the banking metaverse, where they will interact with avatars of relationship managers and robot advisors.
To summarize, if the metaverse becomes a paradigm, it might be a great opportunity for the banking business. The bank will be able to improve its engagement with the community of clients and followers by enabling virtual interpersonal contact in the parallel metaverse that combines the real and digital worlds. Even if transmitted through avatars, it will be instant, interactive, enhanced, and completely personalized. It will improve know-your-customer, bank upselling, and cross-selling operations. In terms of empathy and engagement within the metaverse experience, it will be critical to properly balance the gamification component as well as the degree of probability (or not) of avatars, surroundings, and motions. It will be up to architects, designers, engineers, computer scientists, developers, privacy, and security experts to create secure and compelling cyber-architectures, 3D assets, and multi-sensory experiences.
Resource:
Metaverse as the Next Frontier for Banking, a keynote presentation by Ivan Ivanov at the CX CEE Summit on 23-24 June 2022