Before the advent of the internet, banking was an exclusively in-person activity. Whatever the nature of the transaction, the client had to visit a brick-and-mortar establishment and talk with bank personnel in the flesh. Naturally, this posed problems for busy individuals, especially those who needed to work within the same operating hours as banking institutions. Need to transfer money? Go to work late or leave early.
With the advent of the internet came the emergence of online banking, which virtually erased what used to be an all-too-familiar scenario where you would see nine-to-fivers making a wild dash to the door of a bank before closing time. So long as there’s a reliable connection via Wi-Fi or mobile data, financial transactions get done in a fast and hassle-free manner.
Now, modern banking is about to receive another awe-inspiring disruption. That is by way of the metaverse.
Consider the often-grueling process of financing a business. What if there’s a way for a loan applicant to walk into a virtual bank and discuss credit potentials with a customer representative avatar via augmented reality? While that sounds like a scenario straight from sci-fi, it’s highly probable and might just be online banking’s future.
Online Banking 101
Online banking, also called web banking or internet banking, offers the same services one would expect from their bank’s local branch. Those include making deposits, money transfers, and bill payments. Online bankers may use a desktop to access their bank’s website or a mobile device via their bank’s dedicated app.
To maximize a bank’s online services, clients must register first. That requires the applicant’s details, including their account name, account number, and contact information.
Banks will request information regarding the registrant’s mobile number to send one-time passwords (OTPs). OTPs are typically six-digit codes used by mobile banking apps to verify a user’s identity before granting access to an existing account. That is on top of the password a client elects upon account registration.
Nowadays, banks offer similar basic services via online banking portals. However, to attract more clients, some might include other offers, including check deposits, check ordering, and credit card applications. Other banks might also allow clients to use online banking platforms to put stop payments on checks, as well as to change an outdated mobile number or address.
Online Banking Advantages
This is the number one selling point of online banking. Clients can accomplish financial transactions whenever and wherever. It’s also possible for multiple financial assets to be registered under a single online banking account. That means a person with separate savings and checking accounts can enroll both under one profile.
- Speed and reliability
Online banking processes transactions quickly and efficiently. For instance, fund transfers happen instantly between accounts from the same institution. However, some banks might require transactions to be within business hours for them to be processed immediately.
- Round-the-clock access
Online banking affords clients the privilege to monitor their accounts as often as they prefer. This way, it’s easier to flag potentially fraudulent activities and report their occurrence.
Online Banking Disadvantages
- Limited services
There are financial transactions that can be accomplished only via face-to-face encounters with a bank representative. Those include mortgage applications, purchase of bank drafts and traveler’s checks, and wire transfers exceeding a certain amount.
- Ease of use
Not everyone is tech-savvy. To some people, navigating online banking platforms might be challenging and confusing.
- Connectivity issues
Online banking’s success hinges upon internet reliability. A spotty internet connection might cause difficulty in assessing whether a transaction has cleared or processing transactions altogether.
Online banking remains vulnerable to hacking. That’s why everyone is advised to only do so via a secure internet connection, ideally at home. Never use public Wi-Fi when making online banking transactions.
The Metaverse in a Nutshell
Think of the metaverse as a real world in a virtual space. Imagine real-life objects transmuted into digital simulations, and that’s what the concept is about.
Due to the COVID-19 pandemic, which required people from across the globe to self-isolate, we have witnessed several applications of this technology in recent years.
Consider, for instance, virtual shopping. It gave consumers a chance to walk into simulated shops and try out products that caught their fancy. Meanwhile, virtual concerts and events allowed fans to witness their favorite acts perform without leaving the safety of their homes.
Aside from the e-commerce and entertainment industries, the financial sector is just as inclined to explore metaverse in its pursuit of providing unrivaled services to clients.
Metaverse and Online Banking
Metaverse has the potential to transform online banking as we know it. However, while online banking boasts ease and convenience, it is still quite limited, especially in terms of offering a pleasant, practical banking experience.
Ideally, banking is an immersive activity. With metaverse banking, clients evolve from mere numbers, codes, and OTPs to personalized avatars.
These avatars access the metaverse via augmented reality (AR) and virtual reality (VR). AR and VR headsets are becoming less and less expensive, and it’s safe to say these technologies will become household staples in the near future. That will likely pave the way to the steady rise of metaverse banking.
Imagine this scenario: someone vacationing on a tropical island suddenly realizes they need to discuss something with their bank. They can pop on an AR or VR headset, and voila, they get transported to their bank’s virtual branch with a customer representative avatar ready to answer their concerns.
Metaverse Banking Pioneers
While anticipating the scenario above to become a widespread reality, it pays to know which financial institutions have pioneered the use of metaverse banking, if only to understand the technology’s present capacities. Here are some of them.
- JP Morgan
The Decentraland metaverse hosts JP Morgan‘s Onyx Lounge. It’s a place for financial asset creation, safekeeping, and trading. It also facilitates cross-border payments.
- Standard Chartered
The organization has procured real estate in The Sandbox metaverse, where they are exploring new experiences for clients.
The Sandbox is the corporation’s preferred metaverse, which they will develop specifically for clients active in the e-sports and gaming niche.
- Siam Commercial Bank
Another Sandbox recruit, this bank’s metaverse hosts three virtual hubs that cater to events and knowledge sharing, project development with business partners, and NFT and virtual concert promotion.
Advantages of Metaverse for Online Banking
Metaverse promises the following benefits as a tool employed in online banking.
- Attracting younger clients
The be-all-and-end-all of metaverse-as-tool for online banking is the establishment of virtual branches. This is geared toward attracting a tech-savvy demographic, specifically Gen-Z. For this target audience, metaverse banking can only be the natural progression of life that’s heavily dependent on the internet from the outset.
- Customer service elevation
Banks have been training their employees for the eventual rise of VR transactions hosted in the metaverse. This initiative is anchored to multifaceted customer engagement. The goal is to make clients feel welcome from the moment they walk into a virtual branch.
That entails competent customer representative avatars who can address a specific concern in real time. It’s also imperative for the look and feel of the virtual branch to be consistent with the institution’s image in the real world.
- Synergy between virtual and real economies
The metaverse will erase the dichotomy between financial clients who stick to fiat currencies and those who venture into cryptocurrency and other digital assets. As such, there will be more seamless interaction between these two economies with the technology managing both types of assets.
That means that a client with valuable NFTs who wishes to cash out can easily do so. The same goes for the opposite scenario where a client with fiat currency is interested in purchasing NFTs.
- New products
Sustained innovation will be a welcome scenario should metaverse banking prosper. That is most true for new product creation.
For instance, banks can start offering NFTs and cryptocurrencies to clients, on top of other means of digital payments that will likely arise along with the technology’s evolution. This means there will be new avenues for clients to handle financial management.
- Image development
Financial institutions that are early adopters of metaverse banking give their image a significant boost. It means they are committed to continuously exploring technologies that enhance customer service. Meanwhile, clients who become adept with metaverse banking from its early stage become pioneers themselves.
Financial management is challenging as it is. However, it’s good to know that banking institutions are always on the lookout for ways to make financial transactions more convenient for clients. That’s evident in the introduction of online banking. And it will become even more apparent when metaverse banking comes to fruition.
With noteworthy technological advances available to the financial sector, it’s safe to say that the future of banking looks promising. Whether managing investments for high returns or simply keeping savings safe, practices and standards involved in these processes continue to change for the better. And that’s good news for clients who entrust their hard-earned resources to financial institutions.