The banking industry in the metaverse

The banking industry in the metaverse: the evolution of the bank-customer contact model across sustainable scenarios, data-driven technologies and augmented reality experiences.

By Gianluca Berghella

Banks as well are now considering stepping into the virtual reality of the Metaverse, going through definitions, adoption strategies and use cases. Even if the territory is mostly uncharted, here are some possible application scenarios to look into the future of the banking and financial institutions in the so-called web 3.0.

Topic index

1. The metaverse: contextual reference

2. What are the challenges arising when entering the metaverse?

3. B2C scenarios within the metaverse. The banking offer enhances one-to-one relationships

4. Critical areas: crypto assets restrictions by the Banca d’Italia, ethics and security

5. Conclusions

L'industria bancaria nel metaverso

1. The metaverse: contextual reference

Convergence and fusion among cyberspace, virtual reality and physical world. The metaverse is today a conceptual structure that indicates a digital place halfway between divertissement and business. Luxury fashion brands have entered the first online metaversic platforms (including The SandBox, Decentraland, Exclusible, Unxd) offering exclusive limited edition NFT buying experiences with cryptocurrency to the collectors, in partnership with digital artists and influencers.

The Metaverse Fashion Week in Decentraland took place recently, hinting at the future of fashion while standing firmly in the present. While all market sectors are highly interested, future users and visitors of the metaverses seem not to know exactly what it is.The early adopters are art collectors, who have already been familiar with the logic of bidding auctions and cryptoart for some years, and the very young generation Z who are hyper-connected and digitally inclusive natives, who spend most of their free time in immersive gaming world designed by Epic Games, Roblox and Fortnite.

In this race to the metaverse, some international banking groups, the British HSBC and the American JP Morgan, have entered the virtual space of The Sandbox and Decentraland. However, the use cases for the banking sector are currently to be explored. Nevertheless we can identify some clear sustainable future applications that could offer new, further opportunities for digital evolution to Italian banks of all sizes, based on different business models.


2. What are the challenges arising when entering the metaverse?

As emerged during the AbiLab 2022 Forum, the first three lines of development of the banks for the next three years, regarding customer relationships are:

  • Ongoing improvement of the customer experience across all channels
  • Onboarding and digital sales
  • Enhancement of the services offered across all online channels.

The industry plans of the banking groups will focus on these three lines of action. Initially the metaverse will play an important role in redefining and integrating the online customer journey, making it phygital. Particularly in regards to the initial touchpoints of brand consideration, registration and appointment booking(online, virtual or physical) and the stages that are more related to human interaction, such as the consultancy services.Within the metaverse virtual environment, banks will be able to convey their commitment to technological innovation through futuristic, safe and comfortable cyber-architectures. Banks will be able to promote their values throughout storytelling and ad hoc multimedia campaigns (also in partnership with influencers and testimonials). They will also be able to create their own community welcoming current customers and potential new customers in a new way with exclusive, immersive and interactive virtual experiences, which will increase consideration, appreciation and customer loyalty towards the bank.

The metaverse will allow the banks to increase engagement and offer an “augmented” experience to users. This multidisciplinary approach will be pivotal to monitoring the generation gap, while data-driven technologies will allow to profile the user’s behaviour more accurately.

owever, technological factors such as the interoperability between old and new systems (legacy) and the complexity in controlling the risks for IT security will certainly be something to keep tabs on, just as today they constitute an obstacle to real digital transformation for about 30 per percent of intermediaries (Banca d’Italia, Indagine Fintech 2021).


3. B2C scenarios within the metaverse. The banking offer enhances one-to-one relationships.

Banks aim at making the banking customer journey optichannel – a journey that is increasingly attentive towards the customer, but with greater focus on empathic engagement. Thus the metaverse is the ideal environment for scenarios where the human relationship is central. Thus to offer services featuring a perfect mix between automated personalization carried out by the bank and customization carried out in the “co-creation” phase together with the customer.

Emblematic use cases:

  •  The creation of a branded space for the bank, where to welcome users and at the same time offer entertaining experiences, in order to manage virtual queues for example.
  • The creation of private rooms to provide immersive financial and asset consulting sessions.

In an immersive 3D meeting room with restricted access, the consultant and the investor will meet through their avatars moving, talking, and listening to each other in real time, even in different languages. The experience has the potential to generate a very high degree of engagement.

For example, it is possible to design 3D models of the entire wealth on hold and from this create a further parallel environment with its own visual and spatial features. For the first time the customer can “immerse themselves, navigate and move” in their own wealth. They can query it to immediately access an unlimited amount of analytical and forecast data regarding each asset owned and each investment proposal. In this way, the metaverse experience will combine the multiplayer dynamics with the possibility for the users to create content.

The experience could be lived in immersive virtual reality with wearable viewers, or in augmented reality using mobile devices.


4. Critical areas: crypto assets restrictions by the Banca d’Italia, ethics and security 

It is critical for the banking and financial sector to understand how to integrate into the metaverse transactional features that involve the purchase of NFTs and the exchange of virtual currencies. Precisely because the metaverse was born to monetize the experience in a decentralised system based on the blockchain, similarly to the real world, at present there is no regulation or central body that supervises this type of activity and protects the consumer user.

In fact, central banks do not control the circulation of crypto-assets and cryptocurrencies cannot be considered a real currency. Therefore, the application context of the metaverse for banks could be limited to signing smart contracts without foreseeing any monetisation.

Further areas of study concern the field of privacy, ethics and security, as well as that of the digital identity of avatars. In these parallel universes we move through some form of digital alias of ourselves. It is essential that the use of spaces is regulated, safety distances between avatars are imposed, accounts and personal data are protected and reliable cyber security solutions are in place.


5. Conclusions

The metaverse could be a good opportunity for the banking industry, if it becomes a paradigm. In the parallel metaverse that blends real world and digital world, the bank will be able to enhance the relationship with the community of customers and followers enabling a virtual interpersonal relationship. Albeit mediated by avatars, it will be immediate, interactive, augmented and totally bespoke. It will enrich the processes of know-your-customer, bank upselling and cross-selling.

In regards to empathy and engagement within the metaverse experience, it will be pivotal to appropriately calibrate the gamification component and the degree of likelihood (or not) of avatars, environments, movements. This will be in the hands of architects, designers, engineers, computer scientists, developers, privacy and security specialists, to design safe and engaging cyber-architectures, 3d assets and multi-sensory experiences.

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