How Banks Can Generate Business Value with the Metaverse

By Chander Damodaran, CTO, Brillio

With digital realms spreading across boundaries, where every experience is intertwined amongst each other amplifying the prospect of an interconnected world. The banking industry is readjusting its strategy to ensure it continues to keep its customer at the center of all functions, including the multitude of Metaverses, aptly called “Multiverse”. In fact, pilots are already underway for connected, immersive experiences in areas such as 3D banking and personalized virtual banking. Not far behind are innovative payment platforms and decentralized autonomous organizations (DAOs) that will transform how future generations engage with their banks.

Ultimately, banks must prepare to conduct business in the metaverse economy to reach the next generation of young consumers seeking interactive, meaningful and connected experiences. Here’s why:

Reaching the next generation of connected customers

Banks must prepare now to cater to the customers of tomorrow. For one thing, virtual worlds require virtual currencies, making finance as essential to metaverse-driven commerce as it is in the physical world. For another, delivering financial services through Web3 is an inevitable next step needed to meet young consumers where they are.

Millennials, the last generation to experience traditional banking while transitioning to mobile banking, are at the forefront of another technological shift with the metaverse on the horizon. Given the recent economic turmoil,they’re serious about financial literacy: 75% report they work with a professional financial advisor. Gen Z is still finding their footing, with only 46% of them feeling confident about their financial literacy, but this may be due to the wealth of information available on the topic, from Instagram to TikTok, and it can be difficult to filter out legitimate advice.However, it is Generation Alpha–the children of millennials and the siblings of Gen Z – that banks need to really prepare for. Gen Alpha’s oldest members were born in 2010; for them, it is entirely possible that as adults, their banking might be exclusively conducted in virtual worlds.

Customer experiences banks can prepare for now

1. 3D Banking

Mobile banking has undergone its own renaissance with the help of smartphones, which have evolved to enable seamless transactions and payment processing through contactless kiosks verified by biometrics for extra security.

3D banking is the next evolution which involves an augmented/virtual reality-based, interactive CX.

With the power of AR/VR technology, banks can benefit from setting up learning zones in the metaverse to bring together core services for customers in addition to training its employees. Banks will be able to onboard employees virtually, through the metaverse–a key consideration as hybrid and remote workers continue adapting to the future of work.

1. Personalized Virtual Banking

The metaverse allows banks to deliver tailored experiences, and personalized virtual banking enables a level of human touch that leaves customers feeling valued. With a metaverse branch, banks can create virtual rooms in which avatars of relationship managers and CX advisors work with customers one-on-one to deliver interactive, immersive experiences.

Within metaverse banking, an emphasis on personalization and community creates an immersive and engaging experience for young consumers who are critical to the future of banking. Gen Z has grown up on smartphones and personalization, and are now entering the workforce in droves. Its members crave the social and networking aspects of financial services that make investing a fun, recreational activity. The metaverse opens the door to meeting that expectation in ways the physical world can’t match.

1. Banks will enable and nurture the next Marketplaces: Rise of DAO

DAOs are blockchain-based digital organizations that are governed by their members, rather than a central authority. Activities and decisions are completely transparent and accessible through the blockchain, and rules are enforced through smart contracts. In banking, DAOs offer the potential to create communities and marketplaces, while still enabling banks to earn money on each transaction. The decentralized metaverse runs on Web3, so every transaction is registered and recorded on a blockchain, allowing for the highest level of transparency and security.

The evolution of virtual worlds remains largely unknown, with industry leaders questioning their validity and ability to generate business value. Yet, banks and financial services organizations must adapt to the inevitable–and the metaverse is that inevitability. It’s where banks will deliver the connected, immersive experiences young customers are looking for–and by building an initial presence among the more popular metaverses, while also engaging younger customers through 3D banking, personalized services and becoming the decentralized institution that nurtures an ecosystem of partners, customers in both physical and digital world.