By Maksim Bieliai, BA Team Leader, Fintech Market Analyst at MobiDev
As the third generation of web browsing approaches, technologies across many industries are forced to adapt to remain relevant. Businesses are offering services and products that are more immersive, decentralized, and digital than ever before. The financial technology industry is no exception. There are a number of ways that Fintech has begun to break into the Metaverse that entrepreneurs should understand in order to keep their businesses competitive and innovative.
The Economy of the Metaverse
While AR and VR are dominating metaverse developments right now, there is a significant financial side of the story. As consumers are further driven toward immersive digital experiences, they are also drawn toward virtual assets that require a new digital financial model. This involves crypto, non-fungible tokens (NFTs) and more, which occupy an important place in the layers of the metaverse.
Non-fungible tokens (NFTs) are growing in popularity faster than government regulations can keep up. Their main value is that they can represent unique digital items and serve as a vehicle for profit for many investors looking to get ahead of the curve. Although controversial due to many people in the market using NFTs that involve stolen art or shady investing practices, NFTs have the potential to drive the digital economy forward.
Thanks to this technology, brands can present their real assets and solutions in a decentralized digital environment in the form of NFTs. Blockchain ensures the immutability and transparency of such a system, making the economy clearer for users. Moreover, NFTs could enable users to transfer digital items from one platform to another and gain access to special features in certain virtual environments.
The sale and purchase of digital assets involve the use of digital currency, and today cryptocurrency is the most realistic way to support metaverse shopping. For example, one of the most popular Web3 use cases, Sandbox, has an internal SAND token that can be used to buy virtual land, buildings, accessories and other items in the form of NFTs. Users can buy and sell it on a number of cryptocurrency exchanges.
Such a digital economy system opens up new opportunities for investment and wealth management that cannot be missed out on by modern fintech projects. Therefore, it is not surprising that the Fintech blockchain market size is expected to grow to $6,228.2 Million by 2023 from $230.0 Million in 2017, according to MarketsandMarkets.
Fintech Services in the Metaverse
There are a number of ways that fintech businesses can break into the metaverse to serve clients. This includes examples of immersive experiences within digital banking, trading cryptocurrencies, consumer-first digital payment options, and more.
Immersive Digital Banking
One of the main reasons brands use the metaverse is to increase customer engagement. The most popular metaverse technologies involve immersive virtual spaces in augmented reality and virtual reality. Fintech is a field that can also adopt this experience. Many fintech companies are already providing digital-only services through mobile apps and websites instead of in-person locations. Against this background, being able to ‘visit’ an immersive bank in virtual reality sounds like a futuristic and interesting concept.
Banking in the metaverse, based on AR/VR technologies, can allow users to check balances, pay bills, make transfers and make transactions in a 3D environment, through enhanced data visualization. In addition, banks can expand their role as custodians of customer assets in the metaverse with crypto and NFT-related services.
67% of banking executives believe that the metaverse will have a positive impact on their business, according to The Accenture Technology Vision survey. You can already find successful cases today. For example, the Korean bank KB Kookmin Bank provides its customers with the opportunity to interact with financial advisors in a virtual environment. J.P. Morgan has expanded its footprint to Decentraland with the Onyx blockchain-based platform enabling banking services in this virtual world.
Many projects are already in development and if you are thinking about becoming part of the metaverse, it’s time to start working on partnerships with existing platforms or invest in creating fintech platforms that support metaverse technologies.
Consumer-First Digital Payment Options
Going hand in hand with digital banking experiences on mobile devices and desktop computers, fintech businesses are seeing great success with offering options for consumers to send one another digital payments. Some examples of these include Meta Pay over their Messenger application, and Zelle’s digital payment feature. Zelle has also partnered to provide this service to traditional banks like Huntington.
Blockchain and crypto payments are by far the most common payment method in the metaverse, but that doesn’t rule out other options and technologies. For example, QR payments, allowing you to simply scan a QR code displayed on the screen, or copy and paste the code into a mobile app, can greatly improve the user experience.
The use of AR technology also gives users a more immersive experience by providing cashless and contactless payments. For example, back in 2016, Visa began experimenting with augmented reality payments by creating an app with fashion brand House of Holland that allows you to visit the retail store and make a purchase by simply pointing your smartphone at the product. Today, this payment method will no longer surprise anyone, but it can still become a competitive advantage for the brand until it becomes mainstream.
Fintech Metaverse Apps
A Fintech metaverse app is a great chance for businesses to join the evolving Web 3.0. Some important fintech industry trends include virtual assistant features, embedded finance, lending technologies, money transfer, and more. All of these technologies are innovations that help fintech businesses accomplish their goals and provide better services and experiences for their customers.
For example, virtual assistant technology leverages artificial intelligence to help customers see insights about their spending and help inform their budgeting decisions. Embedded finance also has a number of opportunities for digital fintech businesses to integrate with traditional banking services to provide high-quality features to customers.
These are all features that are in demand with metaverse app development in fintech. It’s up to these businesses and the software developers they partner with to decide how they want these apps to accomplish their goals.
How Can You Prepare Your Fintech Business for the Metaverse Era?
This period of disruption shows that the next generation of the Internet is fast approaching. There are a number of steps that fintech businesses can take to prepare for these changes and remain relevant in the market.
Adopting metaverse technologies like augmented and virtual reality, artificial intelligence, Internet of Things, and blockchain integration are all great steps. However, these steps must be actionable and make sense. It’s one thing to say that your business needs metaverse technologies when creating fintech platforms. It’s another thing to come up with a more specific plan. An example would be, using a virtual assistant in your app to transform data into tailored financial advice for customers.
One of the most important things to remember is that the metaverse is about connection, personalization and innovation. These concepts should be embedded not only in the software but also in the entire strategy of your business.