Open banking in the metaverse

If you think that open bankingis light-years away from its metaverse incarnation, you’re mistaken. Here’s how brands and financial institutions are gearing up to embrace the metaverse. 

• Earlier this year, J.P. Morgan became the first bank to launch in the metaverse 

• Decentraland launched the first ATM in the metaverse 

• American Express filed trademarks for a virtual marketplace and cryptocurrency services in the metaverse, including card payment services, an ATM, banking and fraud detection services

The list of initiatives is long, but they all point to the same thing: banking is ready for one of the most significant overhauls in its rich history. What does the metaverse mean for traditional banking, and how does open banking fit in this equation? Let’s find out.   

Can the metaverse bring humanity back into banking?

Our earliest memories of banking involved people visiting their local branch, waiting in line, and engaging in a conversation with their personal banker. Fast-forward to today, and this experience is almost non-existent. Why? With time being the most valuable asset we possess, we digitised the process, eliminating any ad-hoc, admin and time-wasting elements. 

Sure, the result is a very lean, seamless process where you get things done faster, but what about the personal touch? By eliminating the human element, we’ve created functionally correct processes yet devoid of emotion. 

How can the metaverse change all that? By its very nature, the metaverse foresees inhabiting a digital world with a sense of presence. It brings people together and creates communities and shared experiences. Digital banking can still be fast and efficient, but with another layer of humanity. Let’s use an example to demonstrate. 

Real-life example 

Going to your local branch in the metaverse could entail wearing a VR headset and going through your regular interactions from the comfort of your home. You would be able to chat with the avatar of your banker, interact and establish meaningful connections. 

Financial institutions will have the opportunity to redefine their relationship with customers. The metaverse creates the environment for discussion, a place where the two entities develop into partners that exchange value. 

Communication and humanity bring back the one element banking has longed for: trust. Bringing people closer to institutions is essential to building trust and credibility. Open banking gave people back the control they had relinquished to financial institutions. The metaverse is the next step, coupling control with trust in humanity. People are still in charge of their accounts and data. They just have more help and support at their disposal. 

Open banking benefits in the metaverse

Let’s try and visualise open banking applicationsin the metaverse. What will open banking look like in this new dimension? What will the benefits be to both financial institutions and users? 

AR and VR will redefine customer experiences 

Think of what banking onboarding is at the moment. A long, arduous process where you’re asked a bunch of questions. With the advent of AR/VR technologies in the metaverse, this can become an entirely different experience. 

Wearing their headset, people can have an interactive walkthrough of everything they need to know and complete their registration process by talking to a life-like avatar. No more boring forms and long calls. 

Then you have the customer experience itself. As things stand, whenever you need to inquire about something regarding your finances, you either have to call your bank, send an email or open a chat and interact with a chatbot. The best-case scenario is to log on to your super app and find the solution. 

In the metaverse, customer experience can be explored in so many different ways and layers. For starters, you can have a virtual meeting with a customer support agent and discuss matters over coffee or an activity. The metaverse offers an environment that is not hampered by the limitations of our physical world. There will always be someone available, you don’t spend time, money, or resources to get what you want. 

Customer and employee education

Merging physical and online worlds will allow financial institutions to leverage the power of learning. On the retail side, financial institutions can remotely guide customers through doing their taxes, navigating new products and services, or explaining how mortgages work. 

Such access and ease are unthinkable with today’s infrastructure. Sending emails to inform people about these things usually goes unnoticed as people are not incentivised to engage. Interactive experiences are much more exciting and have a higher probability of success. 

Personalisation v2

If open banking was the gateway to personalised products and services, the metaverse is the highway to personalised experiences. People will be taking part in experiences that are entirely tailored to their use case. Not just products and services, but experiences. Can you imagine being invited to a virtual tour of loans and mortgages that are geared towards your needs? Where an avatar will walk you through every detail of what you need to know without leaving the comfort of your home?  

APIs in the metaverse

When we’re talking about open banking, we’re essentially talking about the underlying technology that powers everything: APIs. Do APIs have a place in the metaverse? They do.

APIs can power financial transactions and be used to support bridges for commerce within virtual worlds. APIs will be the communication vessel that will unify data and information from traditional bank accounts, digital bank accounts and cryptocurrency wallets. 

Moving on to eCommerce, APIs will be the foundation upon which existing marketplaces will build their metaverse extensions. The same goes for social media platforms. There will be a need for synchronisation between web2 and web3 versions of the same product. The way to do that is by utilising the innovation brought forth by open banking technology.