Extended Reality and the Metaverse Are Leading Financial Services into a New Realm of Possibility

By Samantha BarnesInternational Banker

In October 2021, Bank of America (BofA) announced that it would be the first financial-services firm to launch virtual-reality training in approximately 4,300 financial centers nationwide. The training will be accessible to 50,000 employees, enabling them to practice a number of tasks of varying difficulty and simulate client interactions within a virtual environment.

The program marks just one of many recent implementations by the banking industry of extended reality (XR), a technology that encompasses all real-and-virtual-combined environments generated by computer technology. These environments include virtual reality (VR), a computer-simulated technology in which users are wholly immersed in the virtual environment, typically using headsets; augmented reality (AR), which provides an environment in which virtual objects can be overlaid onto the real world and thus “augments” our existing reality rather than creating a new one; and mixed reality (MR), which enables user interaction with both real and virtual worlds.

As for BofA, it partnered with workplace-training start-up Strivr to deliver this VR-based training solution. “At Bank of America, our commitment to being a great place to work for our teammates fuels our focus on innovation,” said John Jordan, head of The Academy at Bank of America. “VR is highly effective at helping teammates build and retain new skills, and it is one of many ways we are using technology to support internal mobility and provide best-in-class learning opportunities.”

Indeed, XR is set to play a massively disruptive role across the entire spectrum of financial services, with banks worldwide now waking up to the vast potential for growth and service-delivery improvements that simulated environments offer, not just on the client-facing side but throughout the entire organisation. Arguably, the most effective application of XR will be in trading, allowing market professionals countless new ways to interact with data and access many more screens of charts and useful information than is possible in the real world. For example, D6 VR is a new project developed by a former Morgan Stanley analyst, Andy Maggio, that is transforming the way traders engage data, primarily using 3D-visualisation tools.

“I believe VR will be the most transformative technology in our lifetime,” Maggio explained to CNBC in August 2021. “The resolution is double what it was five years ago, the hardware is moving forward very quickly, it’s lighter and easier to use, he said. And Lyron Bentovim, chief executive officer of D6 VR’s parent company, Glimpse Group, believes VR is the future of trading. “You’re limited,” Bentovim added in reference to the half-dozen or so screens that traders can use at most in the physical world, whereas with VR, this number can be greatly expanded along with the ability to visualize data across multiple dimensions . “I can see a trader observing multiple trends and then immersing him or herself in the data without being constricted by physical limits.”

At BNP Paribas, meanwhile, VR-based services are being designed to “improve and streamline the Customer Journey” and are already in use within a number of the French bank’s most successful business lines. For instance, it has launched a VR-based app that allows customers to consult their bank-transaction records and examine the various steps of a real-estate purchase entirely within a virtual-reality environment. In partnership with French start-ups Vectuel and RF Studio, moreover, the bank’s real-estate division has developed the POD, a “teleportation” capsule that enables prospective buyers to virtually see inside various properties and offers a fully immersive three-dimensional (3D ) and 360-degree environment. And BNP’s Mobile Protect VR tool, created by BNP Paribas United Kingdom’s insurance wing, is designed to raise customer awareness of the benefits of insuring their mobile devices.

But in recent times, much of the buzz around XR solutions has been generated by the central role they will play in the metaverse—that is, the environment that enables users to exist and interact in virtual 3D spaces. Estimated by several leading analysts to be a whopping $8-trillion opportunity, the metaverse offers massive scope for industries, including financial services, to drastically transform their businesses.

JPMorgan Chase is among the metaverse’s most enthusiastic proponents. The United States’ biggest lender announced in February that it was the first bank to arrive in the metaverse, opening up its Onyx Lounge, referring to the bank’s suite of Ethereum-based products, in Decentraland, a 3D virtual-reality platform with tens of thousands of virtual-land parcels, each of which is an NFT (non-fungible token).

The bank also published a report detailing how it intends to provide all its current services in this virtual world—specifically by having a “robust and flexible financial ecosystem” that enables users to connect between the physical and virtual worlds seamlessly. “We believe the existing virtual gaming landscape (each virtual world with its own population, GDP, in-game currency and digital assets) has elements that parallel the existing global economy,” the report explained. “This is where our long-standing core competencies in cross-border payments, foreign exchange, financial assets creation, trading and safekeeping, in addition to our at-scale consumer foothold, can play a major role in the metaverse.”

In Asia, meanwhile, KB Kookmin Bank has also entered the metaverse with some force. South Korea’s banking major has partnered with VR-content developer Sharebox to create a virtual bank branch that customers can access by wearing a head-mounted VR device. The branch will be used to train employees and teach young adults about finance. Kookmin and Sharebox have also developed the KB Metaverse VR Branch Testbed, which will enable the bank to conduct virtual banking services and transactions, such as remittances, as well as provide one-on-one consultations between customer and employee avatars.

According to the bank’s vice president of tech, Jinsoo Yoon, such steps must be taken to keep pace with advancements being made in technology. “The purpose is to pre-emptively respond to financial changes in the coming metaverse era and to internalise new financial service experiments and technological capabilities,” Yoon said in November 2021.

And with a whole host of other banking projects now exploring the potential of XR and the metaverse, there seems to be no limit to what can be achieved through simulated environments. “How a brand remains relevant will need to evolve, and banks will need to find new ways to build trust,” Accenture recently warned. “As consumers build spaces across the metaverse worlds, banks should not expect to simply move in and monetize. Instead, they should work to proactively build community.”

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