Will the metaverse change financial services? You can bank on it

By Nick Tubb | Sponsored
 
Nick Tubb. Image: Supplied

The metaverse is showing promise for financial institutions, with some already experimenting with its emerging technologies. Meta’s Head of Financial Services, Nick Tubb, outlines three big opportunities that exist today

Oh no, you’re thinking. It’s another piece on the metaverse. Well, yes it is. But stay with me here, this one zeroes in on the finance sector - a place where golden opportunities abound.

First though, a quick refresher. A great way to think of the metaverse is as a series of interconnected spaces. For most of us, the media we have consumed has always been flat - accessed via computer screens and mobile phones. But in the metaverse, we gain an extra dimension. It will be like the internet, but you'll be in it, not just looking at it.

Essentially, the metaverse will be characterised by presence, continuity and interoperability. You will be there when you want to be, and when you’re not, it will exist as a parallel to the physical world.

For the metaverse to reach its full potential, it will also need to be interoperable. What this means is that there will be a foundational layer of standardised protocols and formats. This exists today in many forms. A jpeg, for example, is a universal and therefore interoperable image format of the internet - something you can use, and access, whatever device you're on.

So let’s have a look at how financially focused businesses can make the most of this expanding digital realm.

Bringing human connection back

This might sound counterintuitive, but the metaverse actually presents businesses with an opportunity to reinforce human connections.

For a long time the physical experience of visiting a bank branch was key to building trust with customers. But the role of the branch is changing. Financial institutions now have world-class digital apps, making online banking a seamless, frictionless experience. The pandemic years have only accelerated our embrace of these solutions.

Digital channels, of course, have a stack of benefits - recent research from RFi demonstrated that for consumers who used online channels as part of their home loan journey, a net promoter score of 37 was recorded. For those that did not use an online channel the figure was -31.

Impressive, certainly, but in our move to digital banking, there’s also a risk we lose the human connection - something that has always provided customer reassurance.

That’s why the advent of the metaverse - where the efficiency of digital combines with human interaction - holds great promise for improving customer relations.

For example, we can soon expect business messenger platforms to evolve from text to voice and, ultimately, to avatars. This will provide customers with a new way of interacting with their financial institution, whether it’s conducting simple transactions or researching and locking in a home loan.

Capturing the attention of youth

The importance of younger demographics to financial institutions can’t be understated. But engaging these online natives in tomorrow’s world requires businesses to master two key areas - digital assets and virtual experiences.

By digital assets I’m referring to Web3 and the decentralised infrastructure that gives people the opportunity to buy, sell and share digital goods. We believe that this will be an important aspect of the economic and community-building potential of the metaverse.

One particular area that Meta is exploring is providing the ability to showcase digital collectibles (or NFTs) on Instagram, giving people more ways to connect with their favourite creators.

Then there’s virtual experiences. Augmented reality on Facebook and Instagram is continuing to iterate, providing new ways to connect with customers. Where sponsorship assets are concerned, consumers could soon interact in an augmented reality experience or game and even receive digital memorabilia in their wallets afterward.

Other opportunities exist in bridging the online and physical realms, such as scaling real world events like financial education into digital spaces, and creating hybrid marketing campaigns that also exist in the metaverse.

Some financial institutions are already making impressive forays into the digital world too. American Express, for example, is now offering an Augmented Reality glimpse into life as a Platinum Card holder, with its immersive experience highlighting some of the benefits. It’s a trend we can expect to see continuing.

Leaning into the creator economy

Creators will play a significant role in building the metaverse. As a democratised realm, it will provide ample business opportunities - meaning they should be of interest to any brand looking to enter the space.

To get an idea of how rapidly things have taken off in the creator economy you need look no further than Instagram Reels. Despite it launching less than two years ago, it already accounts for 20% of all time spent on Instagram2.

With its focus on short form video, it has proven to be the perfect platform for creators, who share their content, provide entertainment, and endorse products they have an affinity with. And the creators who are using Reels are now increasingly moving into the metaverse.

What’s the learning here? Ultimately, to be leaders in the metaverse and to engage younger audiences, you need to really understand and experiment with how people are behaving on platforms like Instagram.

Some big players outside of finance are showing our sector what’s possible. Nike - which has long been a tastemaker for the younger generation - has recently acquired creator-led organisation RTFKT. In doing so, it’s making use of the latest in-game engines, NFTs, and augmented reality to create one-of-a-kind sneakers and digital artefacts.

So ultimately, if you’re a marketer who’s excited by the possibilities of the metaverse, the time to start making inroads is now. By experimenting with augmented reality, and partnering with those who are investing heavily in the space, you will be building a technological bridge to the future.

Sources:

  1. RFI Global data referenced comes from the Australian Mortgage Council. The research was conducted in September 2021.
  2. Meta Q2 2022 earnings call

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