Should financial institutions consider Metaverse solutions?
The use of emerging technologies such as the metaverse, augmented reality and virtual reality has generated significant interest and experimentation across various industries, including retail banking. These innovative technologies offer several opportunities for banks and credit unions to improve customer engagement and drive innovation.
The metaverse is going to have a massive impact across all industries, according to McKinsey. In 2022, well over $120 billion in private equity and venture capital funding went into metaverse-related businesses, according to the firm’s report, Value Creation in the Metaverse. This report also claims that the metaverse will generate $5 trillion in value by 2030. In other words, the metaverse is becoming increasingly harder to ignore.
By reviewing how organizations in banking are testing the impact of augmented reality, virtual reality and the metaverse, one sees it is clear that this technology is still being defined. Yet the ability to change customer experiences, product innovation, sales, marketing and revenue models, and every component of digital transformation, is beginning to emerge for early adopting users and progressive companies.
McKinsey defines the metaverse as a virtual universe composed of interconnected virtual worlds, social networks and virtual economies. It is a fully immersive and interactive experience that allows users to interact with each other and with virtual objects in real-time. It is an extension of the internet that allows users to experience a new form of digital reality that is distinct from (and integrated with) the physical world.
The metaverse is not a single platform or technology nor is it limited to virtual reality (VR) or augmented reality (AR). Instead, it includes a range of technologies such as blockchain, artificial intelligence and 5G networks. Web3 contributes to the metaverse by espousing decentralization and interoperability, it’s not the metaverse, which is anchored on immersive experiences that can be both centralized or decentralized.
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