The Banking Executive Magazine - June 2022 Issue

The Metaverse the market size to $800 billion by 2024. Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social and en- tertainment. The metaverse is a new economy, an entirely new business paradigm fu- eled by the combinatorial effect of the evolution of different technolo- gies. At its core, the metaverse is built on the foundations of immersive and decentralized technologies. METAVERSE FUTURE OUTLOOK According to 101 Blockchain analy- sis by James Howell, the metaverse is still under development, and it is too soon to identify the top meta- verse applications in a specific order or ranking. As of now, metaverse technologies are powering new waves of digital transformation across different industries. At the same time, metaverse technologies like VR, AR, and XR are transforming the conventional perspectives on in- dustry best practices and business models. For example, VR has the potential to change learning experiences in class- rooms and workplaces. On the other hand, many existing applications of the metaverse, such as virtual real es- tate tours, showcase the potential for growth of metaverse in the future. The World Economic Forum Annual Meeting Davos 2022 highlighted that digitalisation and the metaverse are revolutionizing the retail industry. The metaverse is going to change how we buy retail products. Clothing brands such as Adidas, Gucci and Vans are already preparing their pres- ence in the digital sphere. Rather than reducing physical sales, the metaverse could unlock opportuni- ties for retailers, but bridging the physical and the digital while creat- ing a cohesive customer experience will be crucial. With multiple uses and features of Metaverse being discovered and ex- plored every day, it is clear that Metaverse could be the next big thing. Several factors, including technology innovations and the rise of the expe- rience economy, are fuelling this rapid growth. For businesses across sectors, the metaverse opens up a number of challenges and opportu- nities. Already, gaming, media, and entertainment are a big component of the metaverse. It is only a matter of time before the banking, com- merce and financial services indus- tries jump onto the bandwagon. METAVERSE BANKING The evolution of banking and their maturity levels can be traced as fol- lows: Traditional banking: This is a two-tier banking model gov- erned by central banks that relies heavily on one-on-one customer in- teractions in the physical space. Tra- ditional banking is heavily manual and paper-based and lacks the cus- tomizations and personalization of products and services. Digital banking: The digitization of banking services can be tracked in two categories. First, the digitization of existing processes, making them available through internet and mobile chan- ISSUE 162 JUNE 2022 the BANKING EXECUTIVE 47