Metaverse hype is at its peak as early adopters and speculators spread the word to accelerate its growth rapidly.
Global spending on the metaverse’s foundational technologies — virtual reality (VR) and augmented reality (AR) — is expected to rise from US$12 billion in 2020 to US$72.8 billion in 2024, according to investment bank Morgan Stanley. With this growth, the volume of metaverse participants and willing consumers will rapidly expand simultaneously, so now is an excellent time for financial services firms to get involved.
So what can financial services firms, lenders, and banks do to become metaverse pioneers, and why is it essential to get ahead of the competition? Let’s find out.
Joining the metaverse: basics and benefits
In financial services, there are two sides to the metaverse: asset transactions and experience content. Asset transactions relate to any process centered on buying and selling assets within the metaverse, while experience content creation centers on developing the digital world in which these transactions occur.
The ability to acquire digital property within the metaverse is perhaps the largest and most prominent benefit for FS firms. Companies and their customers can buy digital land, digital buildings, and non-traditional assets like NFTs (non-fungible tokens), mimicking investment opportunities in the physical world. Financial services firms are becoming enablers of these transactions and purchases, handling the payments and offering alternative digital assets to customers who want to diversify their wealth portfolios.
Even as lending organizations invest heavily in acquiring digital assets in the metaverse, there’s still a big learning curve on the customer side. While the adoption of AR and VR is growing, it will be some time before the metaverse moves away from its status as a speculative market and customers can confidently purchase assets.
There is still a massive cross-section of customers who prefer traditional banking, and not everybody uses (or trusts) digital banking or mobile apps, despite the benefits. Financial services companies will experience the same trend with the metaverse since adoption will be relatively slow, even compared to digital banking. However, as more customers operate in the metaverse, financial services companies can reduce their operational overheads and phase out traditional bank branches or offices. Those that don’t have digital branches or other metaverse-related services will begin to fall behind the competition and increase the cost-inefficiencies of their operations, so it helps to prepare today before the floodgates open.
Getting started with the metaverse experience
Everything boils down to transactions in the metaverse, so there’s an excellent alignment for financial services companies to take advantage of if they can take their customer experience to the next level.
To get ahead of the competition, financial services companies should first focus on creating a seamless, next-level customer experience and pinpoint the best ways to interact with them in the metaverse. Achieving that goal means developing a content strategy that prioritizes seamless cross-channel experiences.
While it might sound daunting, the technology to develop high-quality metaverse content — like virtual reality branches, digital ATMs, or virtual training programs (as tested by Bank of America) — already exists, so it’s the easiest way to get started. Organizations have been creating digital worlds in video games for decades, and these development capabilities are directly transferable to metaverse content. At Globant, for example, our Gaming Studio has many years of experience developing content for virtual worlds, which we are now successfully implementing into the metaverse.
Brazilian bank Banco do Brasil (BB) recently experimented with offering players banking services within the world of GTA Online, a gaming metaverse platform within the highly successful Grand Theft Auto universe. In BB’s virtual banks, the user can carry out operations in the virtual world that materialize in the real world, such as opening accounts and receiving benefits. They can even take on the role of a bank employee or drive an armored car to fill up the bank’s virtual ATMs (with fake money, of course). The project is a great use case of how to bring real-life processes and experiences into the virtual one.
The metaverse is also a fantastic platform for motivational design and proactive servicing. For example, when financial services companies know why a person is coming to them, they can ensure their metaverse presence includes access to an agent or representative who can answer the relevant questions before the customer (virtually) arrives.
As the digital and physical worlds become blurred, companies that have positioned themselves on both sides of the line stand to gain the most.
Sure, the hype may be high right now, and the tangible impacts of the metaverse are challenging to pin down. Still, when FS firms begin seeing how the competition is pioneering in the metaverse, we can expect rapid adoption rate growth.
For consumers, the metaverse may be a speculative market. Still, the end goal is to combine a physical experience with a digital one seamlessly, so once those virtual asset acquisitions, sales, and payments experiences become the norm, they’ll be no looking back. We’ve covered this trend extensively in Globant’s 2022 Metaverse Sentinal Report, which is available to download here.
The main takeaway is that the metaverse isn’t a replacement for traditional and digital interactions but rather enhances and expands financial services firms’ possibilities to interact with their customers. By preparing and strategizing right now, FS companies can secure their place as the frontrunners in this inevitable future.