By Jay Nair, SVP, Industry Head, Financial Services and Public Sector at Infosys
Thanks to digital transformation and trends brought on by the pandemic such as the need to remotely access essential services, banking has moved online and become more transactional. While enabling extreme user convenience, this level of digitalization indeed has its disadvantages. Banking, previously an industry driven by human interaction – a crucial component to build trust – is increasingly mechanical, rather than relationship-based. Chatbots and AI can only go so far in mimicking nuanced human communication one experiences at a physical branch.
The metaverse, with its infinite possibilities of peer-to-peer (P2P), business-to-customer (B2C), and business-to-business (B2B) connections, has the potential to propel banks to the next level of truly engaging customer experiences. Many industries are already exploring use cases of how to conduct business in the metaverse. Banks, too, must take a closer look at how the metaverse can help uplift the digital customer experience.
Metaverse and its Technologies
From being a buzzword that was fictional term coined by science fiction writer Neal Stephenson in 1992, the metaverse has evolved into a viable business case for industrial and commercial applications as well as social interactions. Imagined as a persistent, connected, and immersive world where any asset – be it people, businesses, or real estate – has a digital twin, the metaverse is still nascent and growing. However, there are several metaverse-adjacent technologies such as 5G, augmented and virtual reality, and artificial intelligence (AI), that act as the foundation of the metaverse, allowing it to support numerous industry applications.
Here are some ways the metaverse can support banking operations through heightened customer-centricity.
1. Elevate the customer experience by restoring and expanding customer service channels
As customers grow accustomed to novel and ground-breaking service experiences from entertainment and retail providers, they are now expecting the same from banks. In fact, according to an Infosys survey, 42% of banks rank the ability to provide seamless digital experience as necessary for customers. Some, such as Bank of America, are using VR headsets to augment their training programs by teaching front-end staff to navigate difficult conversations and respond with empathy. In the metaverse, banks can further support such immersive conversations. For instance, a customer’s avatar can engage with bank personnel or even bank assets to carry out various activities such as withdrawing currency from virtual ATMs or getting help from virtual assistants. They can move around the virtual branch, interact with bank managers, seek first-hand information, discuss specific financial products, consult with an advisor’s avatar, etc. Another example is how in 2022 JPMorgan became the first bank to open a virtual lounge and educate customers about the crypto economy. Ultimately, the metaverse becomes an extended channel through which customers can cultivate a deeper trust in their financial service providers.
2. Create innovative banking products and services through metaverse data
Every interaction in the metaverse will generate data, which banks can use to enhance customer relationships, similar to the real world. This data will help banks develop new types of products and services to improve their revenue growth. At the backend, they could enhance their productivity through solutions that support work from anywhere, such as Infosys Meridien, the Live Enterprise Workplace platform. On the front-end, banks could offer interested customers a house tour with a mortgage broker in real time. In addition, they can upgrade their marketing and branding exercises within the metaverse to advertise products and services. Implementing anti-money laundering (AML) and fraud detection services will also become critical to secure customer transactions in the metaverse.
3. Invest in digital assets
The metaverse will provide a new opportunity for banks to leverage their expertise in financial services by investing in digital assets. They can create trusted blockchains to offer banking services, roll out digital and mobile wallets to enable cryptocurrency trading, provide safe methods to store tokens such as NFTs, and empower ‘metaverse mortgages’ so customers can buy metaverse real estate. Banks could also allow new types of digital assets to be disclosed as collateral for underwriting property in the metaverse. They could generate alternate credit scoring models for ‘metaverse loans’ and support lenders with KYC, AML, and more. Some of this is already underway: Infosys research has found that 30% of banks are already investing in digital currencies, 46% in digital assets, and 34% in blockchain.
Conclusion
The metaverse can help banks re-engage with their customers in dynamic and meaningful ways through immersive channels. Further, they can innovate their products and services by harnessing the data created through customer interactions in the metaverse. When coupled with the power of AI and cloud, such data empowers banks to become more intelligent, personal, and digitalized. Hence, it is time for banks to widen their horizons and examine the metaverse as an immersive channel for customers and clients.
