The metaverse is a concept that represents the convergence of trends and technologies that are already in place and growing exponentially. As with any major innovation, the potential evolution of the metaverse is still to be seen, but shouldn’t be ignored. Because of the growing hype around the metaverse, very few organizations fully grasp the impact the metaverse could have on experiences and engagement.
Despite the uncertainty around what vision of the metaverse may emerge, financial institutions should begin to test the technologies and experiences that may become a reality much sooner than many expect. In much the same way that the mobile phone changed the impact of digital delivery within financial services, the metaverse will provide new opportunities for banks and credit unions to integrate physical and 3D experiences for products, services and internal processes.
What is exciting about the metaverse is that it has is the potential to redefine customer and employee experiences, changing how they work and interact. By combining technologies such as virtual reality (VR), augmented reality (AR), Web3, 5G, reimagined design thinking, the blockchain, and digital assets the boundary between physical and digital will quickly evolve.
Full Interview with Ray Wang: Banking on the Metaverse
History of the Metaverse
It has been 30 years since the term “metaverse” was used by Neal Stephenson in his science fiction novel, Snow Crash. In the 1992 book, he envisioned a virtual place where digital avatars could escape the real world. Even before that, the first VR machine was created in 1956 by Morton Heilig. This machine combined 3D video with audio, scents, and a vibrating chair to replicate the experience of riding a motorcycle in Brooklyn. Heilig also patented the first head-mounted display in 1960, combining stereoscopic 3D images with stereo sound.
In 2010, 18-year-old Palmer Luckey created the prototype for the Oculus Rift VR headset, which created renewed interest in immersive technologies. After the acquisition of Oculus by Facebook in 2014, many other tech players entered the virtual reality (VR) marketplace with their own devices, including Sony, Google, Samsung and Microsoft. Microsoft was the first to combine VR with augmented reality (AR), integrating the real world with holograms.
Even before many of the headsets were introduced, games were launched that allowed players be immersed within virtual worlds, earn digital currencies and interact with an increasing number of players. More advanced platforms appeared soon afterward that gave users an even richer experience, allowing them to interact with massive amounts of other players in games like Fortnite, Minecraft and Roblox.
“In the months since Facebook’s rebrand, the concept of “the metaverse” has served as a powerful vehicle for repackaging old tech, overselling the benefits of new tech, and capturing the imagination of speculative investors.”
Today, many organizations, within and outside of banking, are testing innovations related to the metaverse, expanding to the exchange of non-fungible tokens (NFTs) and cryptocurrencies leveraging blockchain technologies. That said, a definition of what the metaverse may represent in the future is both vague and very confusing given the number of major players with a stake in the game.
The Metaverse Economy
According to the Constellation Research report, Monetizing the Metaverse Economy, there are five components of the ‘metaverse economy’, including the combination of the intelligent web, new forms of value exchange via cryptocurrencies and NFTs, new governance models, interactive experiences in digital worlds, and the use of artificial intelligence (AI) and mixed-reality technologies. Constellation estimates that the value of the metaverse economy could be $21.7 trillion by 2030, with a compound annual growth rate (CAGR) of 38.6%.
With so much of this economy still loosely defined (at best), Constellation Research recommends that organizations focus current efforts on understanding the potential and limitations of the metaverse experience. Constellation also suggests that leaders have access to the latest hardware so they can understand the impact of the metaverse economy on a personalized basis.
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3 Ways the Metaverse Changes the Future of Work
The metaverse has the potential to expand the realm of social interaction, mobility, and collaboration in a virtual world that builds on the changes that began during the pandemic. This includes the ability to provide more immersive forms of team collaboration than were possible in the past, with the collaboration happening irrespective of geographic location. This collaboration can be a full 3D experience using headsets, or an enhanced holographic engagement in lifelike virtual workplaces.
Another workplace benefit of the metaverse is the emergence of more interactive and dynamic learning and skills development opportunities. In the metaverse, every traditional manual or user guide will be converted into AI-driven immersive engagement experiences. Gamification can also be used to test skills development and to make the learning process more rewarding.
According to McKinsey, a third way that the metaverse could impact the future of work is through the emergence of AI-enabled digital assistants or digital twins that can serve as virtual coworkers, doing much of the repetitive work, freeing up humans for more productive tasks.
The metaverse provides an opportunity for financial institutions to vastly improve the hybrid and remote work environments that emerged during the pandemic. With new and emerging technologies, there will be increased engagement, greater efficiency and new definitions of the worker experience wherever work takes place.
The Metaverse Changes the Customer Experience
Beyond the potential to reshape how we play, work, and shop, the metaverse provides vastly expanded opportunities to deliver great customer experiences and engagement. As with customer engagement today, the mission of customer engagement in the metaverse will be to emotionally delight customers with value-added engagement. This will require personalized and contextual interactions – at scale – that is driven by data, analytics and new forms of immersive engagement.
The form of engagement is not just converting a physical facility into a virtual reality digital twin, but providing the customer an experience beyond what is possible today. Imagine the power of placing the customer in the virtual house of their dreams, on a virtual island where they want to vacation, or in the diver’s seat of a virtual version of vehicle they want to purchase. In other words, let customers use AR to explore the benefits of the services before they buy, like Warby Parker does with glasses.
A good metaverse customer experience will be where your customers can move easily between a branch, to a mobile device, to a VR or AR experience in the metaverse. Ultimately, financial institutions will be able to offer customer experiences in the metaverse that they couldn’t offer in the real world.
Preparing for Metaverse Banking
While a seamless metaverse experience may be years away, and while the definition of the metaverse may change over time, financial institutions can’t ignore the massive resources being spent by tech giants of immersive technology and experiences. While the timing can be debated, virtual engagement will be a big part of our future.
Banks and credit unions that have tested new technologies and have already done scenario planning will be in the best position to provide a metaverse customer experience in the future. Remember, the financial institutions that innovate through new omnichannel engagement strategies have a higher rate of customer loyalty and engagement. Besides standing out from the competition, the metaverse is an engagement tool that can generate lifetime value.