Ways Banks Can Engage Young Consumers in the Metaverse

Ways Banks Can Engage Young Consumers in the Metaverse

While the metaverse has obvious potential for retail and gaming, these industries cannot function without secure financial transactions, which is why banking is critical to the success of this virtual world. Chander Damodaran, CTO at Brillio, explores how banks can best use the metaverse to reach the next generation of customers.

The metaverse – the virtual world where everyone is expected to work, socialize and shop via avatars in the next few years – is the latest buzzword circulating, and companies have already started taking notice. The Metaverse is a suitable environment for games, entertainment, and retail to provide people with an unprecedented and personalized customer experience like no other. From virtual concerts to collaborating with colleagues around the world, the metaverse has already proven its near limitless potential.

Commerce in the metaverse is real today, and the financial services industry, banks in particular, must adapt their business strategies to reach the next generation of customers who seek personalized experiences.

This creates significant growth opportunities for financial institutions looking to target a younger demographic and a new revenue stream. Here are three opportunities that innovative banks are already identifying as ways to enter the metaverse and generate business value.

3D Banking: a new form factor

Retail banking has evolved a lot over the past two years. The mobile phone has become our bank, with people using their smartphones for everything from balance inquiries and transactions to payments.

Today, 3D banking is the natural next step for retail banks. This represents more of a change in form factor than a radical departure, a new customer channel that involves interactive augmented reality-based CX.

Banks are already setting up learning zones, interaction centers and bot-based customer support centers in the metaverse which brings together all the bank’s core services for customers with its partner ecosystem. They also find that the metaverse is a great way to improve virtual employee onboarding.

The premium experience of personalized virtual banking services

The Metaverse allows banks to roll out the virtual red carpet for customers, with experiences tailored for specific segments and personalities. Personalized virtual banking services allow for that special something that makes customers feel valued.

Within a metaverse agency, banks can create virtual rooms in which avatars of relationship managers and client advisors work one-on-one with high net worth individuals, for example. They can also provide services for people wishing to set up a university fund or for companies wishing to obtain loans.

Metaverse Banking’s combination of personalization and community puts a new, modern spin on CX, and it’s particularly strong appeal to young banking consumers who are critical to the future of banking.

Learn more: The Metaverse is trending more than ever, but is the hype real?

DAOs and the potential for new business areas

Every bank executive wants to explore the possibilities of new lines of business in the metaverse. Enter the Decentralized Autonomous Organization or DAO. These collectives are blockchain-based digital organizations governed by their members rather than a central authority.

For example, a commercial bank that primarily serves as a lender to B2B customers could launch a DAO for its partner ecosystem, inviting everyone from its primary and secondary markets to its customers, investors, and institutions to participate and creating the opportunity for services cross-selling. .

With a DAO, banks become a way to get things done and earn money on every transaction. And because the decentralized metaverse runs on Web3, every transaction is recorded and recorded on a blockchain. Safety and provenance are guaranteed.

In an industry subject to stringent regulatory oversight and compliance, uncertainties surrounding the future of the Metaverse abound. Banks will likely face challenges as the Metaverse implementation continues to grow and evolve, including:

    • Lack of standards: among the multiple platforms and virtual worlds that make up the metaverse, standards are still evolving for file formats and interoperability.
    • Lack of regulatory clarity: including the definition of digital assets. This could expose brands to privacy, reputational, data security and legal risks. However, regulations are bound to catch up as activity in the metaverse increases.
    • Need for specialized equipment: Sales of AR/VR headsets have been disappointing, and consumer AR is still largely the domain of smartphones and tablets. For the Metaverse to become a hit with consumers, headsets will need improved cameras, sensors, battery life and displays. Banks should also start with apps that can run on older hardware for greater accessibility – no need to build a platform that no one can run well.
    • Limited capacity of existing platforms: to support the complexity of design and interactions. Platforms, however, are maturing quickly, and as banks gain a foothold, platforms are bound to catch up.

Yet these challenges should not deter banks and financial services organizations looking to move forward, as congruent solutions are already underway. For example, in the technology industry, we are seeing an increased mobilization to advance the development of virtual worlds. Major players in the space including Meta, Microsoft, and Epic Games include the Metaverse Standards Forum which launched in June 2022 and focuses on interoperability. To add, despite the uncertainties about virtual worlds – and even amid global inflation and US monetary tightening – the integration between digital currency and traditional finance continues to grow. In fact, sixty percent of central banks are pursuing their own versions of digital currency, according to the Bank for International Settlements.

To connect with the next generation of connected consumers, banks must begin to build their presence among the most popular metaverses and increase their engagement with younger demographic audiences through 3D banking, personalized services, and DAOs. The good news? For payment providers and retail and commercial banks, there are no obstacles surrounding the preparation, and it’s not too late to move on. By building and investing in infrastructure to support a holistic view of customer fiat and digital accounts, banks are ensuring their organizations will be at the forefront of the industry in delivering innovative and immersive customer experiences.

If there’s one lesson banks and financial services organizations have learned over the past two years, it’s that they need to be resilient and ready for change. The metaverse is that change. This is where banks must learn to adapt to meet young consumers where they are or are at risk of being left behind.

How can banks better engage young customers in our digital world? Share with us on Facebook, Twitterand LinkedIn.

LEARN MORE ABOUT METAVERS:

Similar Posts

Leave a Reply

Your email address will not be published.