The Banking Executive Magazine - June 2022 Issue

The Metaverse nels. Second, building entirely new customer journeys, keeping digital and data first in mind. During this stage, banks operate like a tech com- pany offering an improved customer experience, customer engagement and customer operations. Open banking: In the past years there have been sig- nificant developments in banking as a service, where banks can seam- lessly connect and offer third-party services through Application Pro- gram Interfaces APIs. Decentralized finance: Blockchain technology, particularly with the advent of Web3, has given rise to an entirely new economy that is borderless, secure, fast, and decen- tralized (without intermediaries). A huge uptake in crypto, NFTs and cen- tral bank digital currencies has led to a new virtual and creator economy by unlocking the potential of entirely new assets in the market. Metaverse banking: Lately, the metaverse has gained market traction across industries, in- cluding the banking sector as well, as the metaverse is becoming the norm to play, work and socialize. According to information age article by Rajashekara V. Maiya, vice-presi- dent at Finacle at Infosys, Cryptocur- rency and non-fungible tokens NFT transactions are among the innova- tions that are set to shape metaverse banking. The opportunities that the meta- verse can present to the banking in- dustry are: Building a competitive edge: The metaverse could be an opportu- nity for traditional banks to compete against the challenger banks and re- cover lost ground from lagging be- hind on innovations around WhatsApp payments or embedded finance. Non-fungible tokens NFT opportunities: A number of people are already transacting in the virtual reality space and investing in NFTs. NFTs could serve as a bridge between users and the metaverse, as they will enable users to facilitate identity during community and social experiences. They could also help identify owner- ship of digital products that exist only in the virtual reality space. Immersive customer engagement: For customers who still prefer to visit a bank branch, banks can now offer an immersive round-the-clock bank- ing experience in the metaverse. Training and education: Some Banks plan to use their virtual branches to educate young people on finance, as well as train employ- ees. Prepare for new age lending: Transactions in the metaverse need a secure medium. Financial institu- the BANKING EXECUTIVE 48 ISSUE 162 JUNE 2022