Metaverse For BFSI: An important marketing medium or a passable trend?

Prasad Shejale talks about how financial institutions can use Metaverse for communication - making it the newest addition to the BFSI marketing plan that can lend a helping hand in its evolution.

The concept of a ‘metaverse’ has always been around ever since technology companies started delving into the virtual reality space for games and entertainment. It has evolved so much over the years with advancements in AR/VR hardware, cloud computing, big data, artificial intelligence (AI), and underlying technologies like blockchain and non-fungible tokens (NFT) that it can now lend itself to several other
sectors including BFSI, education, and retail as well. Here we explore how this evolution of metaverse plays a role in BFSI marketing.

Quite simply, a metaverse is an experiential zone where brands can create tailor-made environments that customers can visit and have an immersive experience. The big difference here is that this is an actual 3D virtual space on the internet, a world beyond the physical and virtual worlds.

An Opportunity For Financial Services

Bloomberg Intelligence estimates that the global metaverse market will be worth a whopping USD 800 billion valuations by 2024. Though currently, metaverse use cases are dominated by live entertainment, games, and social media, there is tremendous scope for financial services too. Take, for instance, the metaverse by PriceWaterhouseCoopers which offers accounting and taxation services.

At the most basic level, the BFSI sector can get on the metaverse bandwagon with new products and customer support services, like how one of the well-known insurance companies did with its virtual reality platform that allows customers to interact with a virtual insurance agent.

There is another example of a bank that launched a VR app for customers to conduct banking transactions and even open an account in virtual reality.

Financial institutions can use the metaverse to train their employees in the virtual world, launch new services faster, and measure responses quickly to change strategy. There is also an opportunity for financial services in the metaverse where transactions are taking place. This is because the metaverse can also use blockchain technology with decentralized finance (DeFi) platform where individuals can buy and sell products/services with non-fungible tokens (NFTs) and cryptocurrency.

Taking It To The Next Level

Besides pushing new products and services, there is an opportunity for banks wherever there are transactions and the metaverse is primed for it.

Blockchain technology ensures digital assets in the metaverse are kept protected in the virtual world, non-fungible tokens (NFTs) provide a means for users to buy things like digital art, virtual land, in-game items in the metaverse and decentralized finance (DeFi) provides the necessary infrastructure for these transactions to take place.

Besides pushing new products and services, there is an opportunity for banks wherever there are transactions and the metaverse is primed for it. Blockchain technology ensures digital assets in the metaverse are kept protected in the virtual world, non-fungible tokens (NFTs) provide a means for users to buy things like digital art, virtual land, in-game items in the metaverse and decentralized finance (DeFi) provides the necessary infrastructure for these transactions to take place.

Now imagine a metaverse where a user wants to buy virtual real estate and approaches a virtual bank for financial assistance. The entire onboarding process and transaction are seamless and safe.

This is a very exciting avenue for BFSI as it presents newer possibilities where companies can provide more investment opportunities in the metaverse.

Also Read: Opinion: How Conversational AI is boosting the AdTech sector

The Right Approach

The metaverse provides a great opportunity for the BFSI sector to create new products, sell existing services and engage with customers in a more immersive way. That said, there are a few things that must be kept in mind:

Plan well, keep it simple: The metaverse is very new and continuously evolving. In order to step into this virtual world, institutions must get their due diligence right first. This includes having a clear purpose, strategy, and approach in the way you plan, deploy and continue to service the venture.

Set small goals: This virtual universe is new for the BFSI sector as well as individuals. So the most ideal thing to do is to set smaller goals. This will allow you to assess the response, go through feedback, and course-correct. Don’t be afraid to experiment because there is no textbook answer to success in the metaverse. Use the learnings to embark on larger initiatives in the metaverse.

Keep the customer in mind: User privacy and maintaining security guidelines are central to any new product or service deployment. Since policies around DeFi, NFT, and cryptocurrency are still being formulated or up for consideration, institutions must ensure that user privacy and personally identifiable information and transactions are handled with utmost safety.

The metaverse presents a unique and truly exciting space for companies in the BFSI space to capitalize on.

In 2020, the metaverse economy saw more than the US $20 billion in retail sales and has continued to grow 40% annually. This indicates there is a lot of scope for BFSI as well, where individuals can spend, invest, and interact with financial institutions seamlessly in the metaverse.

The metaverse ecosystem—which includes AR/VR hardware, blockchain technology, NFT, and DeFi— may take time to mature, but the potential for financial institutions to start experimenting and engaging with customers in more innovative ways is too big to ignore.

Prasad Shejale, Founder & CEO, Logicserve Digital penned a piece on how and why metaverse is relevant to the BFSI sector for marketing.