Innovation in finance: part II
What changes is Web 3 bringing to the banking industry?
Immersion is a crucial component of the digital revolution, and Extended Reality (XR) is becoming more prevalent in our daily lives. Encompassing Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR), the future potential of XR and Web 3 has the banking industry exploring ways to integrate them into their operations. ?
Due to new products, instant transactions, investment options, and sheer uncertainty, users are interacting with their banks more frequently than ever before. Whether logging in to check balances and transactions, making payments, or speaking directly to a customer service agent, people expect convenient and accessible experiences that meet their needs at every step. ?
With most banks struggling to adapt to new customer expectations, Web 3 technology could help them reimagine their services and sidestep potential disruption through the fusion of nascent technologies such as XR and blockchain.?
What's trending among younger consumers? Personalized digital banking. ?
Increasingly, younger generations rely on digital banking to manage their finances because it offers the convenience of not having to visit a branch or stand in long lines, as well as instant updates on account balances and payment history. Because digital banking is available 24 hours a day, there's no need to set aside time for banking once you leave work. The idea behind personalized XR banking is that thanks to technology, each person can have an individualized experience with their bank from the comfort of their home, whether setting up a loan or speaking with a financial advisor. The tech offers many benefits to clients; imagine being able to access a loan officer through your Oculus while sitting in your kitchen, avoiding the stress of waiting in a cramped bank during the post-work rush hour.??
The biggest challenge for the financial sector in the metaverse? Security and regulations. ?
The biggest challenge for banks operating in Web 3 is securing their assets and customer data against cyberattacks. Banks employ various security measures to protect their and customers' data in the physical world; when banks transfer their customers' data to a virtual world, they are heavily scrutinized and must fully protect their customers to ensure their data is not misused. Banks must be vigilant and prepared to respond quickly to potential violations and be especially careful using new Web 3 technologies; the same issues that led to hacks and data breaches in other virtual worlds will also exist here. ?
Enter RegTech. Banks can comply and manage control processes more securely through regulatory technologies like biometrics, fraud management, KYC (know your customer), and AML (anti-money laundering). Companies like Cappitech by S&P Global offer regulatory reporting for online banking, while FinChat Technology and KyoLAB help companies stay compliant with mobile messaging and support.??
领英推荐
Robinhood Crypto promises low fees, speed, and better accessibility. Will Polygon blockchain measure up to the hype? ?
Robinhood's success has led them to expand into crypto trading, promising low fees, quick transfers of funds between accounts, and easy accessibility for new traders. They've launched beta testing of their Robinhood Wallet for 10K waitlisters through Polygon, which boasts scalability and of being a developer's dream network. Robinhood aims to offer a multichain wallet that supports a broad number of blockchains. While NFT trading and marketplace activity are not yet supported, they are anticipated for the wallet's final rollout.?
As promising as this all sounds, there's still water to trudge. As global financial markets have become increasingly digital, the risks inherent in trading essential assets like stocks, commodities, and currencies have increased. Robinhood has been under scrutiny for the gamification of investment and individuals not fully understanding the risks of trading certain assets. Both Robinhood and regulators will need to push for better capabilities to improve the quality of vetting of financial products.?
A new wave of financial innovation is gradually being implemented.?
The financial industry has undergone an unprecedented transformation. With new technologies on the rise, we are witnessing the effects of digitalization and the power of XR and Web 3 come to life. The new wave of financial innovation is gradually being implemented, enhancing customer experience.?
With the ever-growing tech industries at their doorstep, it is only natural for financial institutions to innovate in the physical, digital, and virtual worlds. For example, banks and investment companies are entering the metaverse:??
Financial institutions with the most to gain are those with their finger on the pulse of the ever-changing economy - they've already begun to invest in Web 3 technology, and by getting in early, they have prepared for the future.??
Is your company considering entering the metaverse? Contact us today to start your roadmap to success!?