Is It Time to Adapt Banking to the Metaverse?

The metaverse will become the next global milestone after the digital transformation in the coming decades. Indeed, it is the Internet’s transition from a two-dimensional to a multi-dimensional experience that will require significant creative effort. This new world will lead to the rapid development of a creative economy. The primary role of banks is to unify the online and offline financial experience that brings real Metaverse Development Service and virtual assets together but are banks prepared?

Why Banks Might Need Creative Experts?

After Facebook changed its name to Meta in the fall of 2021, the whole world started talking about the development of the Metaverse. But in the spring of 2022, the hype died down and the war and the global energy crisis took the global spotlight. Of course, it’s still too early to talk about a full metaverse, but the user experience of the metaverse is already available, and will surely create a new economy in the coming decade. 

The Metaverse is a collective, interconnected space of digitally enhanced environments that use digital platforms, virtual reality (VR), and augmented reality (AR) to bring consumers a variety of immersive experiences as digital extensions of the world for entertainment, creative, and work purposes.

It will become an independent virtual economy enabled by digital currencies, non-fungible tokens (NFTs), and other digital assets. We expect the metaverse to evolve into a digital universe for personal, business, and financial interactions, merging real and virtual assets. 

Citibank experts predict that the Metaverse will be the next iteration of the Internet, or Web 3.0. Such an “Open Metaverse” would be owned and maintained by the community and would be a free-running version that would guarantee privacy.

Users have access to a variety of use cases including commerce, arts, media, advertising, healthcare, and social collaboration. It will be accessible via PCs, game consoles, smartphones, and VR and AR headsets. Using this broad definition, the total addressable market for the Metaverse could be between $8 billion and $13 billion by 2030, with a total of about five billion Metaverse users. 

If these predictions come true, the Metaverse will create the third-largest economy in the world in terms of GDP after the United States and China. 

The key to developing the metaverse and the new digital reality is creativity, which will fuel the global economy of the digital age. It will transform the metaverse into an alternate world that will capture the imagination and attract billions of people.

Creativity is the essential basis of human nature. The development of the individual, society, and humanity is unimaginable without creativity. For the first time in history, with the advent of digital technology and later the metaverse, the creative industries come to the fore and received the recognition they deserve.

A creative economy, according to Wikipedia, is based on people using their creative imagination to increase the value of an idea. John Howkins wrote a book in 2001 to describe economies in which value is based on innovative creative features rather than traditional resources such as land, labor, and capital. Unlike the creative industries, which are limited to specific industries, the term “creative industries” refers to creativity throughout the economic system. 

The main question is how this new world will work and on what principles it will be built. Metaverse technologies will not only be able to take financial services to a new technological level, but will force a rethink of finance by expanding the process, objects, and subjects of transactions.

Are Banks Missing Out On Billions Generated By Digital Creative Industries? 

Millions of people are already creating the Metaverse today. Although only 30 million VR headsets are in use, the most popular Metaverse predecessors are currently online games like Fortnite, Roblox, and Minecraft with a total of 500 million users.

Fortnite is an online fighting game in the virtual world with many experiences. A Travis Scott Fortnite concert during the COVID lockdown in 2020 had 27.7 million unique visitors, far more than a typical concert hall can accommodate. Scott raised approximately $20 million from Fortnite for the five digital concerts, each lasting 10 minutes. 

Another example and one of the most successful players in the Metaverse world is Roblox. Founded in 2004 the platform has 47 million daily active users worldwide and 9.5 million developers creating user-made worlds and games.

Sandbox is the largest virtual world in terms of transaction volume with 65,000 virtual land transactions totaling $350 million in 2021. In the same year, Decentraland became the second-largest virtual world owned by users based on Ethereum with 21,000 transactions. $110 million in real estate transactions, driving virtual property prices up 700%. The most expensive property in Decentraland was the Fashion Street Estate, which sold for $2.42 million. In August 2022, Decentraland announced plans to launch, the world’s first Metaverse ATM. Decentraland’s Transak Metaverse ATM is the world’s first fiat-to-cryptocurrency ATM. The initiative aims to help users easily buy MANA and other cryptocurrencies. 

Global companies like PwC, JP Morgan, HSBC, and Samsung have already confiscated virtual land that, they plan to develop for various purposes. DBS was the first Asian bank to partner with The Sandbox to launch DBS BetterWorld to demonstrate how the Metaverse can be harnessed as a force for good. 

And even a forward-thinking city like Dubai announced its Metaverse strategy to become one of the top 10 metaverse economies in the world, as well as a global hub for the metaverse community and creative industries. We see banks buying land in the Metaverse, but are all of these bank branches creating innovative value or an innovative experience for customers in the Metaverse?

40% to 65% of 1,004 consumers surveyed by PwC in 2022 expected the ability to virtually explore new places from the Metaverse; Interact with healthcare providers, customer service representatives, and well-known brands; attend courses/training; Play video games; participate in entertainment experiences; discover and interact with new brands; explore job opportunities; interact with colleagues; buy and sell physical products; create content for others to engage with; buy and sell digital products; Use a digital wallet, and meet new people. 

NFT digital art sales volume hit $25 billion in 2021, but is the traditional economy ready for it? We’ve all heard about the NFT artwork titled “Everyday: the First 5000 Days” by the artist known as Beeple, which set a record for digital artwork with a $69 million sale at Christie’s in 2021. 

But hardly anyone has heard about the crypto artist Ilya Borisov from Europe who in the same year 2021 became one of the most famous generative artists in the world, sold 3,557 NFT paintings for 8.7 million euros, and now he can’t pay them because her bank account was confiscated by the police six months ago.

He faces up to 12 years in prison for his enormous income, which state officials have failed to interpret as nothing more than “large-scale money laundering,” even though he paid taxes on it.

In a creative economy, digital artists, designers, and developers who profit from every sale and resale of the digital assets they create become new billionaires. The expansion of objects available for digital monetization will result in everyone being able to create value in the Metaverse, the full democratization of finance. Crypto artists and crypto investors create enormous wealth in months, but it seems that the potential of new technologies is still too unexpected and suspect to be accepted by the traditional economic system. 

Integration with traditional financial institutions is an important issue in the development of the metaverse, as they are often reluctant to go beyond the standard ad motifs. Fiat money and thus traditional financial institutions should connect digital assets and cryptocurrencies to the real economy. Therefore, the speed of development of the creative industries depends on how accessible and user-friendly financial services are in the metaverse. 

Without this integration, the early pioneers of the metaverse tend to be outlaws. Unfortunately, today we see that banking and tax services lack the competence, experience, and regulations to handle crypto assets. 

Maybe the Banks Are Waiting For a Clear Request From the Traditional Business

Gartner projects that by 2026, 25% of people will spend at least one hour a day in the metaverse to work, shop, learn, use social media, or entertain. According to McKinsey’s forecast, the Metaverse could generate up to $5 trillion in value by 2030.

Accenture’s Technology Vision 2022: Meet Me in the Metaverse report shows that 98% of executives believe ongoing technological advances are becoming more reliable in predicting future strategies than economic, political, or social trends. Seventy-one percent of global leaders say the Metaverse will have a positive impact on their organizations, and 42 percent believe it will be a breakthrough or transformational one. 

Metaverse technologies have been available since

and are currently in use. In 2018, China’s Xinhua News Agency launched a virtual newsroom with an artificial intelligence anchor capable of delivering breaking news to audiences 24 hours a day. 

Exciting metaverse and 66% of business leaders say they’ve gone beyond metaverse experimentation by creating proofs of concept, testing use cases, and even generating revenue from the metaverse.

Eighty-two percent of executives expect the Metaverse to become part of their business operations within three years.

According to research from PwC, more and more companies are hiring talent focused on the metaverse and digital assets and investing in resources connected to the metaverse technology. Nearly half of respondents believe hiring people with skills in Metaverse-related areas is a top priority to capitalize on the next Metaverse trend. 41% prioritize investments in relevant

technology, 40% are willing to research customers to define potential use cases and 39% train employees on new technologies. 

Are the Banks Willing To Play Their Part in the Development Of the Metaverse?

Financial services in the metaverse will become the connector of the next creative economy, connecting real and virtual assets. And the main problem is the lack of forward-thinking required to develop competition and deliver the customer experience demanded by the growing creative economy. Financial services growth points in the metaverse could include:

1. Digital Skills Development Enhance the finance company’s internal digital metaverse skills by adding IT, and metaverse experts or consultants to the team. Find someone you are passionate about and can guide you. Try the Metaverse experience for yourself, learn about new technologies, predict the impact of the Metaverse on your business, and design appropriate customer experiences and digital strategies.
2. Implementing a disruptive internal culture Financial brands can keep up with digital innovations by embracing a flexible disruptive culture. This way of thinking and working allows us to think outside the box and adapt to new technologies and customer trends. Every employee in such a culture is open to constantly reinventing the customer experience, taking it to a new level, and offering a solution that is far more useful and enjoyable than any other alternative on the market.
3. Tracking customer expectations To be ready for adaptation, it is essential to constantly monitor and detect changes in customers’ digital behavior and have the technological resources to adapt quickly and efficiently. By staying alert to the ever-increasing changes in customer needs, companies should be able to prepare in time and react in time, enabling them to extend their digital solutions to new platforms and deliver the solutions customers demand.
4. Focus on an Existing Experience must remember that many financial brands are focusing on the next digital trends to achieve a superior competitive advantage. But first, we need to ensure that the existing service is well thought out and executed to protect users from friction and frustration. Take the European NFT artist as an example: It didn’t take innovative technology to serve a $10M lawyer, just a little more skill and attention. You can often do a lot to improve the customer experience and put people first even before you deploy innovative technologies.
5. Business Legacy Review People’s habits and outdated ways of thinking often prevent them from seeing new opportunities. In financial services, it makes sense to practice an experiential mindset across the organization, with the courage to challenge the old mindset. As a result, the finance brand team will organically focus on customer care and be open to embracing the digital innovations demanded by the new generation of consumers. 

Conclusion 

In the creative industries, people don’t just buy and sell products, services, or features. They appreciate the experiences and emotions behind them. In the metaverse, people pay large sums for intangibles that have special meaning and provide relevant experiences. And the main question is, how can a financial company be so customer-centric that its digital products provide the best possible experience in the Metaverse?

According to a study by Dimension Data, 84% of companies have increased their sales by accepting a customer. focused approach. A McKinsey study shows that customer experience leaders increase company revenue by 10-15%, achieve higher customer satisfaction scores, reduce service costs by 10-20% and increase employee satisfaction. 

According to Deloitte, the creative industries are likely to be a key driver of long-term economic growth, so the role of financial services in this development is undisputed. Already today we see the active participation of fintech companies in the technologies of the metaverse and other digital innovations that support the development of the creative industries.