Faster processes, an engaging customer experience and lower operating costs – the metaverse holds huge potential for banks and insurance companies. In the race to maintain their image as the most forward-looking and forward-thinking industry, financial institutions must quickly embrace the changes and work to craft a foolproof metaverse strategy that sets them apart from the pack.
The metaverse has promised a very intriguing future for many financial players, but how is this going to be achieved and why are so many people embracing the technology? Kunal Purohitdirector of digital services Technology Mahindraan Indian multinational information technology services and consultancy, analyzes how different regions have reacted differently to the metaverse and what makes it so attractive.
Purohit has over 20 years of experience split evenly between head office and field roles. In his most recent role before joining Tech Mahindra, he led HCL‘s Digital Business and Practice in Europe and was based in the UK. He also spent significant time leading HCL’s Office of Corporate Strategy and worked with the CEO and Board of Directors to enable strategic decisions regarding the organic and inorganic growth of the business.
Using his expertise, Purohit said Fintech time on the advantages of the metaverse:
According Bloomberg intelligence Metaverse market revenue is estimated to reach $800 billion by 2024. In step with the changing times, it is the start of a new era for financial services. JP Morgan, the largest bank in the United States, has already taken the first step and opened a branch in the metaverse. In one place, the financial institution can now serve millions of customers without maintaining a physical presence.
In addition to a smooth customer journey, higher employee satisfaction, and savings in operating costs, going virtual offers immense benefits. For example, with a presence in the metaverse, banks and insurance companies can drive their digital transformation without having to invest in physical spaces, while positioning their brand as forward-looking and innovative.
For many companies, the metaverse is uncharted territory, but the tide seems to be turning in the right direction. Immense opportunities await banks that ensure their core IT is modular and digitally ready to interact in the metaverse. Not only does the consulting process take place in the virtual world, but real-world transactions and the upselling and cross-selling of new products can also be done in the metaverse.
There are already many examples of banks using money earned as points in online games as a mortgage to lend real money.
Data management – the key to success
The ability of banks to structure and analyze a variety of data, and then use it across all channels when dealing with customers, is critical to presence in the metaverse. Effective data management and breaking down internal silos are key to enabling a smooth transition.
So when looking at the different components required for a metaverse migration, it quickly becomes clear: the metaverse requires compute, machine learning, and other database and security services that are inextricably linked. to cloud computing. For example, as more and more storage and computing power is needed to support a virtual reality universe, remote cloud computing will be the only cost-effective way to solve this challenge.
Moreover, data is the basis of everything that happens in the metaverse.
As more and more people and businesses participate in this virtual universe, the need for data and data processing will only increase. A cloud is also needed for redundancy and high-speed transmission of pixel data for believable experiences in the 3D world. Additionally, to enable data protection, security, reliability, and scalability, the comprehensive capabilities of cloud technology are essential. To top it off, cloud-based software requires virtually no hardware investment and offers the greatest possible flexibility through pay-as-you-go.
GCC markets are in step with momentum
The financial industry is very interested in the Middle East, a region known for its status as an early adopter in technology and automation. Cloud computing is already happening in many cases and metaverse adoption is imminent.
According to a TENDENCIES MENA study, the metaverse is poised to transform banking in the GCC. The use of the metaverse in banking can lead to the emergence of fully digital bank branches, reducing or even eliminating the need for physical branches. A Kuwait-based bank recently became the latest company from the Middle East and North Africa to enter the metaverse. The bank now owns two sites in the metaverse, one on Decentralized and another on Sandbox.
Governments in the region are at the forefront of metaverse adoption. Saudi Arabia announced billions of dollars in cutting-edge technology investments earlier this year. To facilitate growth in the metaverse, the UAE government recently approved a digital economy strategy that aims to double the sector’s contribution to its GDP from 10% to 20% over the next 10 years.
Along with this development, Dubai recently announced the launch of its metaverse strategy, which aims to foster innovation in new technologies. Dubai has over 1,000 companies operating in the metaverse and blockchain sector, contributing $500 million to the national economy.
With the early adoption of the metaverse, Dubai aspires to become a top 10 metaverse economy and a global leader in the adoption of digital solutions. The Dubai government has estimated that the metaverse could add up to 42,000 virtual jobs and over $4 billion by 2030.
In December 2021, the Abu Dhabi Investment Office (ADIO) and Mubadala Investment Company signed a preliminary agreement with Roborace accelerate the development of the mobility industry using autonomous technologies and metaverse infrastructure to facilitate faster and wider adoption of these innovations.
Such impressive developments only point to the next big revolution underway – the Metaverse, which has the power to take the digital customer experience to new heights. After all, customers would be very excited to be digital avatars of themselves to interact, explore and access services in the digital world and experience new areas of banking.