Metaverse and Banking Industry – 2023 The Year of Metaverse Adoption

This whitepaper discusses the potential of Metaverse to revolutionize the banking industry. It highlights the various ways in which banks can leverage Metaverse to improve their operations, including through the use of NFTs, blockchain technology, and smart contracts. The paper is aimed to explore the possibilities of Metaverse in the Banking Industry and understand its practical implementation radius. This paper navigates to various topics from the definition of Metaverse to business aspects in banking and financial services. Explores the various business opportunities in the customer communication domain, cross-border transactions, mortgages, digital assets, green loans, and achieving carbon net zero through Metaverse. The role of Innovation Leaders is discussed in detail assisting readers to understand and appreciate the value of innovation in today’s rapidly changing technology times. The paper argues that banks must take a proactive role in driving the adoption of Metaverse, support circular economy, and reduce waste by enabling web3.0 technology in the banking sector.


Introduction
Metaverse is a platform that has the potential to revolutionize the banking industry. With its ability to facilitate seamless and secure transactions, improve customer communication, and help achieve carbon net zero goals, Metaverse presents a unique opportunity for banks to enhance their operations and stay ahead of the competition (Allam et al., 2022). Whether it be through the use of NFTs to replace traditional payment methods, leveraging blockchain technology for cross-border account opening, or creating new business models using smart contracts and digital identities, banks have much to gain from tapping into the power of Metaverse (Plechatá, Makransky & Böhm, 2022). As innovation leaders in this space, banks must actively explore opportunities within Metaverse and work together with other stakeholders to drive its adoption in the banking industry. With continued investment and commitment, we believe that Metaverse has the potential to transform banking as we know it and pave the way to accelerate circular economy adoption in the field of technology for a more sustainable future.

What is Metaverse?
The Metaverse is a broad term used to refer to the various simulated worlds and the Internet developed by Chinese billionaire Wang Xing (Plechatá, Makransky & Böhm, 2022). The Metaverse can be thought of as an interconnected virtual world, similar to the internet but consisting of threedimensional virtual spaces instead of pages on websites. It includes social media sites and other applications that allow users to create their digital avatars and participate in real-time interactions with each other. As more people use these platforms, it is becoming increasingly difficult for governments around the world to regulate or control what occurs in the Metaverse (Mystakidis, 2022). Many experts believe this could lead to major changes in our political and economic systems over time, as well as raising significant questions about how we define individual rights and privacy online.
We have entered a world where most of your daily life is online, we work in the hybrid model so work is online, higher education online, interviews and global seminars online, initial healthcare appointments online, and opening a bank account, reading statements, and discussing disputes online.
With Web3.0, digital banking needs to upgrade the game plan by introducing an immersive experience, Metaverse is inevitable.

Can we use Metaverse in the Banking Industry?
There is a growing interest in using the Metaverse for banking applications, as it offers a variety of benefits to banks and financial institutions, including improved customer communication, streamlined transactions, reduced costs, and enhanced security. For one thing, the Metaverse provides an easy way to store, access, and manage data related to customer accounts. This can help banks better understand their customers' needs and preferences, which can lead to improved services and more personalized offerings (Seth, Gupta, & Singh, 2022). In addition, the Metaverse allows banks to easily integrate with other financial systems and applications, reducing costs while improving efficiency (Allam et al., 2022). Overall, these benefits make the Metaverse a compelling choice for use in the banking industry, from making account transactions to facilitating cross-border payments and digital identity verification.
Another point of view is -we can buy and sell goods and services to users on Metaversewhether that is NFTs (music, pictures, video, or any other artwork content), avatars, virtual meetings or concert passes, or banking services. When so much of buying and selling happens online with digital assets then the mode of payment will be a digital currency (banks around the world are working on it). Therefore, Central Bank Digital Currency and Metaverse may marry and bring a whole new world in front of us.

Metaverse in Customer Communication?
The metaverse is a key component in customer communication. To effectively connect with customers, businesses must create a virtual space that encourages interaction and engagement. This can be done through social media platforms, online forums, and other digital tools that allow users to share information and interact with one another (Golf-Papez et al., 2022). There are several benefits of incorporating the metaverse into customer communication strategies. For one, it allows businesses to collect valuable data about their customer's preferences and behavior patterns. By understanding what drives your target audience, you can more effectively tailor your messaging and marketing tactics to meet their needs (Plechatá, Makransky & Böhm, 2022). Additionally, the metaverse provides an opportunity for businesses to build stronger relationships with their customers by fostering meaningful interactions and creating a sense of community around shared interests and values. Whether it's through brand-sponsored contests and promotions or a dedicated customer support forum, the metaverse can help your business deepen its connections with customers in meaningful ways (Buhalis, Lin & Leung, 2022). One of the major benefits of incorporating the metaverse into customer communication strategies is that it allows businesses to collect valuable data about their target audience (Allam et al., 2022). By 64 Technium Vol. 4, No.10 pp.62-73 (2022) ISSN: 2668-778X www.techniumscience.com analyzing this data, companies are better able to tailor their messaging and marketing tactics to meet the needs and preferences of their customers.

Can we replace SMS, EMAIL, and CHATBOTS with Metaverse?
The meteoric rise of messaging apps such as WhatsApp and WeChat has demonstrated the powerful role they play in modern communication. Many users appear to be replacing SMS, email, and other services with chatbots on these platforms. Although traditional messaging tools are still widely used today, their dominance is being threatened by a new generation of technologies that leverage the power of artificial intelligence (AI), computer vision, voice recognition, and other cutting-edge tools.
This has led some experts to speculate about a future where we will need no other means to communicate than virtual reality (VR) platforms like Metaverse (Jovanović & Milosavljević, 2022).
Banking and financial services, in particular, could benefit from the ability to conduct transactions and manage their accounts through a virtualized environment. As previously mentioned, one of Metaverse's key value propositions is its ability to integrate with other VR platforms such as Oculus Rift, HTC Vive, and PlayStation VR. This means that users can have a seamless experience where they can switch between different tools without having to take off their headsets or log into multiple channels (Krnjajic & Wesslén, 2022). Whether we will see the rise of more specialized messaging apps remains unclear at this point; however, it seems certain that advances in AI are driving us toward a future where VRenabled interfaces play an increasingly important role in our communication habits (Plechatá, Makransky & Böhm, 2022). Thus, the future of Metaverse in banking and finance looks quite promising, from using it for transfers and bill pay to managing investment accounts.

How Banks can deliver their monthly statement through Web3.0 and Metaverse?
The banking industry is rapidly adopting new technologies to improve the efficiency of its operations, as well as to better serve its customers. One of these technologies is Web3.0 and Metaverse, which allow banks to deliver their monthly statements through online portals or virtual reality platforms with ease. One advantage of using Web3.0 and Metaverse for delivering banking statements is that it allows customers to easily access and view their statements online, anytime and anywhere they want.
This can be especially useful for customers who may frequently travel or have busy schedules that limit their ability to visit brick-and-mortar branches regularly. Additionally, this technology also helps reduce paper waste by allowing users to download or print out digital copies of their banking statements instead of taking physical copies. Another benefit of using Web3.0 and Metaverse for delivering banking statements is that it provides improved security measures to protect sensitive customer data, such as login credentials and personal details (Banaeian Far & Imani Rad, 2020). This helps to reduce the risk 65 Technium Vol. 4, No.10 pp.62-73 (2022) ISSN: 2668-778X www.techniumscience.com of data breaches which can cause significant financial and reputational damage to banks. Furthermore, banks can also leverage analytics tools within Web3.0 and Metaverse to better predict the spending habits of their customers, which in turn can help them provide more targeted marketing offers and promotions (Kiong, 2022). Overall, there are numerous benefits of using Web3.0 and Metaverse for delivering banking statements, including improved efficiency and customer service, as well as enhanced security measures to protect sensitive data (Allam et al., 2022). With every new technology acceptance era, it replaces various devices, for example, smartphones replaced cameras, watch, torch, computers, telephones, and many more devices. If the industry would have utilised smartphones properly, we could have reduced waste effectively in the past decade. Similarly, we have analysed that Metaverse will help in reducing land waste, food waste, electricity waste, water waste, and more if functioning and communication in Metaverse are initiated instead of physical bank branches.

How Metaverse can help in achieving Carbon Net Zero?
Carbon net zero is achievable if we utilize technology smartly since it can help us achieve energy efficiency. Metaverse can be used to achieve carbon net zero by various means, such as reducing costs in the energy sector and providing a reliable accounting system (Thompson et al., 2022). For banks and other utility companies, Metaverse offers shared ledger solutions through its all-inclusive digital identity verification for customers by integrating a trusted identity mechanism. This saves time and money that is spent on a manual KYC process, while subsequently reducing the carbon footprint of each company (Plechatá, Makransky & Böhm, 2022). This also allows for more transparency in transactions between different parties and helps reduce fraud since all parties have a clear record of ownership and past transactions. Additionally, Metaverse incorporates smart contract functionality so that once specific conditions are met on one side of an agreement (i.e., the bank or utility company), it automatically triggers processes on the other side of the transaction (i.e., the customer). The bank or utility company can then provide instant notification of transfer to the customer, from when the customer has agreed to a contract through to when the money is transferred, allowing for instant fulfillment of contracts (Subramanian & Subramanian, 2022). Metaverse supports branchless banking that is digital in nature with a human touch through an immersive experience. Thus, no physical land purchase for buildings, furniture, electricity, a new set of office goods, etc, may increase the waste on the planet. Metaverse in its way contributes to building circular economy culture -reuse, refill, and reduce waste through technology.

How Metaverse will redefine Mortgage's business?
A mortgage is a financial product that allows people to buy houses with borrowed money.
Traditionally, the mortgage has been provided by banks and other financial institutions, who assess the risk of lending to individual borrowers to determine how much money they are willing to offer, at what rates of interest, and over what period. But Metaverse promises to change all that. By using blockchain technology, this innovative new platform will completely redefine mortgages as we know them today (Melnyk, Kuchkin & Blyznyukov, 2022). With Metaverse, lenders can quickly assess a borrower's creditworthiness based on factors such as their income history, job stability, credit score, and total assets -without having to rely on traditional methods like paperwork or lengthy appointments with bank loan officers (Renduchintala et al., 2022). Furthermore, the use of smart contracts on Metaverse will ensure that all terms and conditions of the loan are transparent and fair while helping to reduce fraud and minimize the risk of loan default. As a result, the mortgage on Metaverse will be faster, easier, more efficient, and more secure than ever before -offering people greater access to homeownership at lower costs overall (Kuang, 2022; Mystakidis, 2022).

How Metaverse will replace the Debit and Credit Card business with Metaverse digital identities and cryptocurrencies and transactions?
Debit and credit cards have become a staple for daily transactions. However, there are some significant problems associated with the use of debit and credit cards such as the hassle of having to carry them around and the risk associated with losing them. to demonstrate their environmental credentials. They could create "green" loans or other assets that are tied to environmentally friendly initiatives, allowing them to build trust among customers and potential investors looking for socially responsible investment options. There are many opportunities for banks to use NFTs in innovative new ways (Smith, 2022). Whether it's increasing customer engagement with credit cards and other financial products, providing more flexibility in making transactions, or demonstrating their social impact and corporate responsibility, NFTs are paving the way for a new era of banking that benefits both customers and businesses alike.

Innovation Leader's Role in accessing Metaverse and benefits it can bring to Banking Industry
From 2023, the banking industry will see a lot of innovations as we enter into the Metaverse era. It is estimated that 85% of customers today are still not using virtual reality or augmented reality services and -more importantly -don't know how it could benefit them in their daily lives. For example, it has been estimated that with the appropriate attitude toward Virtual Reality and Augmented Reality,  Banks can avoid lending to designers-houses that promotes their products by making celebrities wear or use them whenever stepping out in public. Only Produce, Consume, Reuse, Buy or sell products that will reduce waste. Metaverse could be a role model for the circular economy, we could help people, corporations, NGOs, and regulators fast-track the movement with effective policies to march towards a world without waste.

The future of Metaverse in the Banking industry
The future of Metaverse in the Banking industry is shrouded in possibilities. Trends expected from 2023 to 2028 include greater collaboration between banks and technology companies, new regulations that promote innovation, as well as increased adoption from industries beyond financial services. The potential applications of Metaverse in the banking sector are numerous (Brik, 2022). For instance, Metaverse can be used to streamline compliance procedures, reduce fraudulent activities, and facilitate cross-border payments, especially from 2023. In addition, Metaverse can also be used to create digital assets that represent fiat currencies or other assets such as bonds and commodities. These digital assets can be traded on Metaverse's decentralized exchange, which offers a high degree of security and transparency. The use of Metaverse in the banking sector is still in its early stages. However, given the numerous advantages that it offers, it is expected to gain widespread adoption in the coming years. This would revolutionize the way banks operate and would bring a host of benefits for both customers and institutions (Allam et al., 2022)

Companies that are investing heavily in Metaverse
Following are some of the major companies and banks that are investing in Metaverse.

1) JPMorgan Chase & Co.:
JPMorgan Chase is a leading global financial institution that has been actively involved in blockchain technology research and development since 2015. The company's interest in Metaverse is evident from its recent partnership with Digital Asset Holdings, a blockchain startup, to develop a platform for issuing and trading digital currencies.

2) Microsoft Corporation: Microsoft is another big name that is investing in Metaverse.
The company has been working on blockchain technology for a while now and has even launched its blockchain-based platform, Azure Blockchain Service.

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Technium Vol. 4, No.10 pp.62-73 (2022) ISSN: 2668-778X www.techniumscience.com 3) Goldman Sachs Group, Inc.: Goldman Sachs is one of the largest investment banks in the world and it is also one of the early investors in Metaverse. The bank has been working on blockchain technology for a while now and has even launched its cryptocurrency trading platform, called Circle Trade.

4) Deloitte LLP:
Deloitte is one of the 'Big Four' accounting firms and is also one of the leading professional services firms that are investing in Metaverse. The company has been working on blockchain technology for a while now and has even launched its blockchain-based platform, called Rubix by Deloitte.

5) IBM Corporation:
IBM is another big name that is investing in Metaverse. The company has been working on blockchain technology for a while now and has even launched its blockchainbased platform, called IBM Blockchain.

6) Capgemini: Capgemini has an Applied Innovation Exchange that drives innovations, and
hackathons, establishes correlation regarding Buy Vs Build, and is focused on the latest technology that supports the circular economy and sustainability initiatives through technology like Web3.0 (Metaverse, NFTs, Blockchain, Digital Assets and more). The company has been working with various brands and helping them onboard on Metaverse.
These are just some of the major companies and banks that are investing in Metaverse. With such big names backing it, Metaverse is sure to be a big success.

Conclusion
Overall, it is found that Metaverse has an impressive and promising future in the banking industry. We are witnessing the digital drive that banks are moving from a paper to a paperless era.
Another drive is branchless banking which is no physical branch. This has triggered a way for digital banks during the pandemic in 2020, and since technology is changing so fast another movement triggered in just two years is that -we will be seeing Banks moving onto Metaverse. It provides many advantages over the traditional banking system and is expected to gain widespread adoption in the coming years. The pandemic has fast-forwarded the digital transformation and Metaverse is inevitable.
In the future, we will be online on different metaverse constructed by numerous providers. Shifting to the metaverse environment opens up the opportunity to accelerate the circular economy and reduce waste. This would revolutionize the way banks operate and would bring a host of benefits for both customers and institutions. Companies must invest in Metaverse to future-proof their businesses. The

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Technium Vol. 4, No.10 pp.62-73 (2022) ISSN: 2668-778X www.techniumscience.com government needs to take note of this and support the development of Metaverse by providing the necessary infrastructure, such as a digital identity system and decentralized exchange, and regulators to upgrade themselves with new technologies to match the tech-acceptance frequency that users have.
Media needs to play a role in creating awareness about Metaverse and its benefits, from which the general public can benefit. Our economy would benefit greatly if Metaverse is widely adopted, as it would reduce fraudulent activities, and facilitate cross-border payments, especially from 2023 onwards -the year of Metaverse adaptation. We need to embrace Metaverse and use it to our advantage, by taking the lead in its benefits and well-informed decisions to reduce waste on the planet through research and development labs and an applied innovation mindset.