In the late 1990s and early 2000s, when the number of ATM machines went up in India and Internet banking took its baby steps, the footfall in banks started decreasing. People didn’t need to visit the bank for day-to-day transactions like withdrawing or transferring money or depositing cheques.
Over the years, the banking experience was further revolutionised as digital transactions took centre stage. In the past couple of years, several processes, such as know-your-customer (KYC), also went online.
The banking industry now finds itself at the precipice of another revolution—metaverse banking.
The Union Bank of India recently launched its metaverse banking option called ‘Uni-Verse’. Though there is no information about other banks entering the domain in the near future, internationally, HSBC Bank and JP Morgan are already into metaverse banking.
Metaverse banking aims to offer the same functionality as a traditional bank branch but in a virtual 3D animated environment. As of now, however, most of the banks are using it as a marketing tool, but proponents claim it will go a step ahead and add a personal touch to digital banking.
The Promise Of Human Touch
Recently, a reader reached out to us, saying how his grandfather, who doesn’t even use Internet banking, will never use the metaverse technology in banking. The reader said that his grandfather, who is a retired individual, prefers to go to the bank for his day-to-day transactions as that is one of the many activities that helps him socialise.
The reader got that right, but unlike other technology-driven services, metaverse banking seeks to bring back the human touch that senior citizens cherish, though digitally.
Says Mahesh Ramamoorthy, chief information officer, YES Bank, “Virtual banking along with the 5G network will help usher in the next era of immersive banking. The metaverse offers a chance to reintroduce dialogues that have been lost in digital channels.”
Unlike the digital banking that we are familiar with, which has a 2D interface through a browser or app, metaverse banking aims to offer a 3D experience. It aims to recreate the experience of walking into a physical bank branch, virtually.
“Metaverse will ensure interactions through digital avatars, providing a human touch which will deepen and personalise customer interactions. Also, the visualisation of data and ability to use avatars will provide a gamified approach to resolving complex banking processes,” says Rajiv Mishra, chief general manager, Union Bank of India.
Will It Keep That Promise?
Metaverse banking promises to bring back the human touch that seems to be lost in the 2D digital banking system but the fact remains that this “human touch” will still require a technological interface.
Says Rajesh Mirjankar, managing director and CEO, Kiya.ai, “The ability to manage finances and transactions in this new environment will be key to making it as immersive and comparable or better than real-life interactions with additional access to enhanced visualisation of information.”
As a result, not much may change for customer categories such as senior citizens and the non-savvy population. “The generation gap will surely play a role in the slow adoption of technology,” says Mishra.
As open as young people are to emerging technologies, they do not strike a chord with senior citizens, who value human bonds—even for things like their banking needs—over all else.
Things To Watch Out For
Senior citizens may also get doubly exposed to the risk of frauds. Says Ranjan R. Reddy, founder and CEO of Bureau, a California-based cyber security company, “Metaverse is more prone to fraud via social engineering, account takeover and identity theft. In a virtual reality world, it might be difficult for consumers to differentiate genuine users from fraudsters.”
Navigating the metaverse may not be that simple for everyone. Says Pratik Gauri, co-founder and CEO, 5ire, a Dubai-based sustainable blockchain company, “A more significant threat to the financial industry is that the metaverse represents and often features synthetic identities, such as avatars. Synthetic identity is a crucial threat that financial institutions must prepare for.”
Synthetic identities can be fraudulent identities that attackers stitch together, utilising stolen consumer details with fictitious data, explains Gauri, adding that financial institutions will have to adapt their fraud prevention strategies to deter attacks.
Moreover, metaverse banking will also entail extra cost as users would need virtual reality/audio reality (AR/VR) headsets that can be paired with their devices to access it.
“For wider adoption, the cost of physical equipment like VR/AR headsets will have to come down dramatically,” says Muzammil Patel, global head of strategy and corporate finance, Acies, a management consultancy company.
The Road Ahead
As of now, the user interface is not a reality. For example, UBI’s Uni-Verse is presently an informative virtual lounge displaying the bank’s products such as deposit, loan, digital products, government welfare schemes, and others.
Patel says metaverse banking still has a long way to go to become a two-way street, where virtual engagements convert into actual banking transactions. “For metaverse banking to come of age, banking services like payments, trade services and loan origination, as well as support services like KYC and customer onboarding will need to be delivered through virtual or mixed reality.”
These are still early days for metaverse banking in India. It remains to be seen whether this technology can be a game-changing one for the ever-evolving banking industry.
neelanjit@outlookindia.com