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Banking in the Metaverse: Perspectives on Opportunities and Realization

Metaverse is the new buzzword in the world of business.

It promises to transform customer engagement and deliver a captivating and immersive experience to users. The metaverse exists at the intersection of the physical and virtual worlds. While the concept of virtual world gained popularity with advent of video games, other industries are quick to explore this opportunity.

With analysts estimating that individuals will spend about an hour a day in their virtual avatar in the near future, the financial services industry must act fast. The metaverse can be embraced to reimagine customer and employee experience, define new products and create new business models. This blog highlights the different business opportunities that banking and financial institutions can explore and benefits therein.

Metaverse: The next frontier of innovation and opportunity in banking

The financial services industry has always evolved with emerging technology trends and consumer behavior. It was initially disrupted by digital technologies, then by open finance and blockchain and now probably by the metaverse!

The metaverse, a virtual shared space, promises to be the next big thing in the transformation evolution. It is a combination of physical and virtual reality and offers users the ability to play, learn, socialize, and transact. Tools and technologies such as Web 3, Non-Fungible Tokens (NFTs), Virtual Reality (VR), Augmented Reality (AR) form the foundation for the virtual world in metaverse.

We believe that the banking and financial services organizations should and would explore the “art of the possible in the metaverse” across four key dimensions, that we call “Winnoverse – Winning on the Metaverse”. We believe that the four key dimensions are ReImagine, Invent, Co-Create and Simulate. The ability to provide an immersive and human-centric experience helps banks to reimagine their traditional products and services. Metaverse provides an opportunity for banks to invent new products for the virtual world. It is envisaged that every industry would explore and build their metaverse and an interplay of these metaverse would bring forth a new dimension of co-innovated products. An early use case of adoption of VR has been its ability to provide a platform to transform employee learning and onboarding experience, to be able to simulate scenarios and provide real-life learning experience.

 We shall explore how banking organizations shall explore these four dimensions in the subsequent sections.

1. Reimagining Banking services in the Metaverse 

Digital Banking provides the flexibility of anytime, anywhere banking, but it lacked the empathy that came with human touch. Metaverse promises the digital capability with the personalized human effect. 

Imagine a customer walking into the bank’s branch. The long queues and wait times are no longer needed to get to the ATM or Teller. The digital avatar of customer just breezes into a luxurious lounge of the virtual branch from the confines of his/her home. The experience thereon is captivating and engaging. The customer is automatically authenticated and all the relevant demographical and financial history of the customer and retrieved by the branch service representative’s digital avatar. The customer avatar can scan around, touch and feel the products provided and explore them.

Insightful Account Services:

The traditional bank statements received in print or digital can be done away. Metaverse gives way into a captivating view of 3D transaction dashboards. One can touch a specific line item and can explore spend patterns, peer comparisons and advisory tips on where to optimize and the services than be leveraged.

Engaging Lending & Mortgage services:

Metaverse provides the opportunity to take a 3D tour of properties of interest. Multiple properties and assets for purchase can be reviewed in quick time and an appropriate financing option to complete the purchase can be explored with the bank’s service representative avatar.

Reimagined Wealth & Investment advisory:

Customer can engage with Wealth advisor’s avatar to gain insight on financial performance of different financial products to make informed decisions. Trading decisions using multi-dimensional visual analysis of future scenarios in market trends, securities performance can be more rewarding. Comparing multiple insurance options with insurance agents to secure our future can be easier and more convenient.

Crypto Wallets gaining mainstream:

In the metaverse, crypto currencies form the foundation. Hence, metaverse provides the ability to manage crypto wallets and the facility to convert between multiple fiat and crypto currencies.

Many financial institutions have begun to explore these possibilities. JPMC’s lounge on Decentraland, Citi’s VR based trading apps, Mastercard’s crypto payments, Westpac’s VR based account management apps are few examples.

2. Inventing new products for the metaverse 

The metaverse opens up avenues for financial institutions to provide financing and insurance products for the purchase of virtual and digital assets in the metaverse.

The metaverse mirrors the real world with its concept of virtual plots, establishments, shopping malls and much more. Customers and investors engage in shopping a variety of consumables such as wearables, art collections, music, videos and games. The financial metaverse provides the backbone to buy and sell such digital assets through their crypto wallets. The financial metaverse can also provide different financing options and insurance products for these purchases.

TerraZero, the real estate developer develops, acquires and finances innovative Metaverse projects, companies, entrepreneurs, and developers—creating engagement, community and usability solutions which bridge the real world and the Metaverse. JP Morgan has developed the complete Shopping district named Metajuku  in the Decentraland Metaverse. Industrial Bank of Korea (IBK) are offering Dotori Bank Account in the Cyworld. HSBC has purchased the plot in Sandbox to connect with sports, esports and gaming enthusiasts. The bank will work with sports partners, brand ambassadors, and Animoca Brands to co-create experiences that are educational, inclusive, and accessible.

3. Co-Create through collaboration of different metaverse

An interplay of financial metaverse with the metaverses of other industries throws up interesting business models and products.

An automobile metaverse could provide the customer avatar an unbelievable experience in exploring different car models, driving experience and then making the final choice. Further, a seamless  interaction with the financial metaverse can help the customer explore different financing and insurance options and complete the transaction.

The travel and hospitality industry metaverse can provide a delightful experience to the travelers exploring exotic destinations. The metaverse provides similar opportunities to the Utilities industry, Real-Estate industry, Entertainment industry, besides others. All of these metaverse worlds have a potential to integrate with the financial services metaverse to complete the financial transaction, thereby making the experience wholesome to the end customer.

4. Simulate and Learn on the metaverse

Simulation, gamification and Interactive learning is the way for the future. 

The ability of the metaverse to provide a three-dimensional view of data and enable personalized interaction and gamification makes it an ideal platform for learning. Financial institutions can use the metaverse to groom their customer service representatives in handling various scenarios. Similarly, back-office trading staff, insurance agents, and wealth advisors could use this technology to simulate different scenarios and improve the quality of decisions. Leveraging the metaverse can significantly improve employee experience in onboarding, induction, and continuous learning. In fact, this is already happening—a leading US bank uses VR to simulate real-world customer service scenarios to train its employees, identify skill gaps, and provide targeted follow-up coaching and personalized guidance to improve performance.

The metaverse journey: From theory to action

Metaverse as a technology is still evolving and it is important to understand the key challenges and put the right considerations in place to make the journey successful.

The banking and financial services institutions need to have a good understanding of the important building blocks of the metaverse and the salient aspects that needs to be addressed to make the metaverse experience fruitful.

Key Building blocks

Key Building Blocks

The interaction layer provides the ability to customer to login to the financial metaverse and explore the different products and services it provides. It also helps customers to seamlessly transition across financial metaverse and other virtual worlds. The Application layer provides the core set of applications that deliver the reimagined and new financial products that have been described in the earlier section. The financial backbone provides the digital currency backbone to support metaverse transactions and the ability to transition between fiat and digital currencies. The entire landscape is supported by shared functions that ensure authentication, security and privacy and regulatory compliance.

Key considerations in designing and implementing a metaverse

While putting the metaverse ecosystem together, few key elements that need to be addressed include:

Identity management and authorization: Establish an avatar’s identity and authorize the right access; maintain the linkage between the virtual avatar and the real customers’ identity.

Security and privacy: Secure data flows between AR and VR devices and the layers of metaverse applications within the organization and across VR worlds. Ensure data protection and eliminate the possibility of data leakage at all layers of data flow. 

Fraud and risk management: Enhance fraud management and risk controls given the potential for financial risks, money laundering, and malpractices in the metaverse’s decentralized operational model, especially in the absence of a centralized regulatory authority.

Regulations: Explore use of artificial intelligence (AI) and machine learning (ML) technologies to customize know your customer (KYC), due diligence, identity verification, and transaction monitoring processes. Ensure information sharing across different metaverse platforms.

Standards and interoperability: Collaborate to create open and common standards for metaverse definition and interoperability. Standards such as ERC 721 from Ethereum for NFTs are a step in this direction.

Integrated customer relationship management: Engage with customers and manage the relationship across both physical and digital spaces and the metaverse. Store and manage customer context and interaction history and use it effectively in customer management.

High performance technologies: Invest in high performance hardware and compute capability to capture and deliver real-world experiences. This could include medium range desktop systems, headsets with motion tracking capability, and haptic gloves or leap motion controllers along with the relevant software applications.


Planning the metaverse journey:

Banking and financial institutions must factor in some key operational aspects while defining the implementation roadmap.

 Metaverse Journey

The use cases that could create an impact in the customer base can be evolved using the proposed Winnoverse framework. It is important to prioritize the use-cases based on a benefit vs. risk and effort model as proposed below. The prioritized use cases can be taken through a phase of implementation. It is important to set up the foundation of technology infrastructure as a pre-requisite. The key building blocks and considerations for the same have been discussed above. Some financial institutions have been initiated their journey through pilot of simple VR applications in prioritized use cases. As technology matures and traction builds with the user base, the metaverse can be further explored and scaled.

In a nutshell

With customers expected to spend more time in the virtual world, financial services institutions must explore the metaverse to capitalize on the opportunities it offers.

While the metaverse is still at a nascent stage and its success will depend on the progressive evolution of the entire ecosystem, it is indisputable that its impact on the financial services industry will be profound in the long run. Given that a few players are experimenting with VR applications and investments in metaverse, financial institutions must take measured and well-thought-out steps to embrace this disruptive technology, or they risk falling behind in the race to offer virtual services to customers.

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Rajesh Tengshe

Rajesh Tengshe



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08 Mar 2022



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