FinTechBanking in Metaverse – The Next Banking Revolution

August 26, 20220


The term “Metaverse” was first coined by author Neal Stephenson in his science fiction novel Snow Crash in the year 1992. However, it could not have been imagined in the wildest thought that this term will become so prevalent and will become talk of the town. However, the rapid development in technology with the help of digital and internet revolution in the digital virtual space had made this possible.

The transformation in the digital and virtual space in light of the digital revolution, the discussion with respect to the development of banking sector has been completely revamped.

The banking ecosystem of India has already gone through rapid changes since the last decade, moving from a conventional brick-and-mortar system towards a comprehensive digital ecosystem. Until now the banking was on finger tips with the help of a technology layer which allowed banks to perform tasks like data validation, analytics, payments etc., in an instant.

However, the next leap for banking is Metaverse, The idea of “Banking in Metaverse” has a lot of potential as it will allow its consumer to conduct business with any bank in the world without ever leaving their home.

In this article we attempt to discuss what is Metaverse, what is Banking in Metaverse, how Banking in Metaverse will work, the future of Banking in Metaverse and how it going to revolutionize the Banking sector in the world. 


The concept of Metaverse is regarded as the most recent advancement in the virtual reality field. The depths of the Metaverse make it difficult to bind it in one definition, but most technology experts consider it is as a virtual reality platform where people may engage socially and professionally, invest in property, create digital assets, take classes, work, and even travel in 3-D virtual reality using their avatars.

As the metaverse expands, it might produce online space where user interactions are more multidimensional than what is possible with the available technology. Simply said, users will be able to engage themselves in a space where the physical and digital worlds converge in the metaverse, which will enable them to do more than just view digital information.


In view of the above, it is clear that Metaverse is a virtual world, where people will be able to engage socially and professionally. Therefore, similar to real world Metaverse will require an infrastructure with the help of which people can transact, own, sell, or create a digital asset.

Therefore, the term “Banking in Metaverse” can be construed as the mechanism, wherein the banks with the help of AR, VR and cryptocurrency can manage of financial transaction such as lending, withdrawal, payment, etc., in virtual environment.


a. The Banking Perspective

That in view of the above the term “Banking in Metaverse” can be construed as the management of financial transaction in virtual environment. Therefore, with the help of AR and VR technology, banks will be able to provide virtual cash, non-fungible tokens, service of payments, insurance, loans against virtual real estate in the expanding metaverse economy.

Further, the Bank will be able to leverage the AR and VR technology to create innovative customer interaction such as, the Banks can also initiate and put together virtual client interactions like cash transactions from virtual ATMs thereby simulating virtual client interactions like cash withdrawals from such virtual ATMs.

Thereafter, the Banks with the help of AR and VR technology will be able to invent innovative financial products such as –

i. Digital payments: Banks will be able to provide secure wallet functionality and payment rails for metaverse products, services and economies.

ii. Digital assets: Banks can extend their role as custodians of customers’ assets by securing, insuring and lending against cryptocurrency, NFTs and virtual real estate.

iii. Digital twins: Banks can re-create a virtual infrastructure of a property to provide a virtual tour of the same a person might be interested in buying rather than simply browsing 2D photos and video.

b. The Consumer Perspective

The Banking sector has grown drastically in the last decade, since the concept of banking conventionally was construed as an institution where the Bank branches were used for depositing and withdrawal of currency in the form of banknotes. Thereafter, with the onset of ATMs that came along with the introduction of debit and credit cards, obliviating the requirement to withdraw and carry cash.

Thereafter, with the development of technology electronic payments came into picture, which obliviated the use of physical card. However, the digital banking is functionally independent, it was often construed as emotionally detached.

Now, the concept of Banking in Metaverse will allow the consumer to have a more engaging experience as it brings human touch to the digital experience and virtual interactions conducted in the Metaverse. Apart from that, the Banking in Metaverse offers to put the humanity back in banking and restore the dialogue and human interaction, which got lost in the digital world.

It will be manifested based on technologies like Augmented Reality (“AR”), Virtual Reality (“VR”), and blockchain, which will enable people to virtually meet and interact with banks. Therefore, Metaverse for banking could mean transforming the present-day online banking experience to a virtual space that would render an experience of walking into a bank physically.


In the last few years, there has been a surge in the field of metaverse with tech giants like Meta, Microsoft, Tencent, and more making their big moves in the metaverse space. Lately, this new phase of the internet is attracting attention from banks as well.

Some of the established institutions have already started to explore the metaverse development. Few of the examples are –

  • JP Morgan

In 2022, JP Morgan acquired a virtual commercial space in Decentraland, which is a browser-based platform for 3D virtual worlds. By using the MANA cryptocurrency, it operates on the Ethereum blockchain, users can purchase virtual land parcels on the platform in the form of Non-Fungible Tokens (hereinafter abbreviated as “NFTs”)

Further, in the future, JP Morgan plans to bring business opportunities worth more than $1,000 billion to the metaverse. JP Morgan has been one of the major proponents of blockchain and its uses in banking system. Thus, the corporate giant while initiating the said development into the metaverse was very obvious.

  • HSBC Bank

In 2022 itself, the bank has acquired a virtual land in the Sandbox. At present, the said virtual space only shows a video that mentions about HSBC occupying the land.

  • Standard Chartered Bank

In May this year, Standard Chartered Bank announced that it has invested in a virtual land on Decentraland as well.

Therefore, in view of the above it is apparent that all of these banks are attempting to participate in the metaverse’s emerging economy. Banks can provide services like insurance and financing against cryptocurrencies, NFTs and virtual real estate, which represents an untapped source of growth. It is entirely up to the bank to decide what part they will play and how they will use the metaverse to increase their market share.

  • Union Bank of India 

The state-led Union Bank of India recently on 8th July, 2022 have launched a Metaverse-based virtual lounge, where it will showcase its products to customers virtually, it is the first Indian Bank to open a virtual lounge.

The Union Bank of India vide its “Uni-verse”, the Metaverse virtual lounge, plans to deliver a unique experience of banking to its customers who can roam around the lounge, get information of the bank’s deposits, loans, government welfare schemes, and digital initiatives as if they are experiencing the real world.

Further, the Union Bank of India intends to showcase the Metaverse lounge through the newly-built Digital Banking Units (“DBU”). The DBU is a specialized fixed point business unit or hub that houses specific basic digital infrastructure for offering digital banking products and services and servicing current financial products and services in self-service mode at any time.


The Future of Banking in Metaverse is very bright, since in view of the first graph on “Consumer use of Virtual and Augmented Reality for transactions” approx. 44% of the consumers believe that at least 20% of the consumers of this world will start using VR technology within a decade, which can be considered somewhat accurate prediction, since it is evident from the second graph on “Consumer AR/VR Revenue worldwide” that the use of AR/VR technology is increasing each year.

Further, in respect with the future of Banking in Metaverse, there are two aspects as a result of which Banks will make shift to the Virtual world that is –

i. The Influence of Currency 

The second circle of influence is currency. in the traditional period the Banks used to sell items that were based on real-world elements. However, this dynamics has been altered due to introduction of algorithms. Now, with the help of advanced technology currency can be created in cyberspace using cryptocurrencies and non-fungible tokens.

ii. The Influence of Consumer

In the overall journey of the Banking Sector from the conventional methods to the digital means, it becomes very clear that, when the consumer used to conduct transaction solely in the physical world, so were the banks. However, since now the consumers spend an awful amount of hours online, the banks have followed the suit and introduced digital banking to allow their customer to undertake transactions digitally in an instant manner.

Further, since the generation Y and Z have grown in the age of technology, they will always be on the look-out for quick and easy ways to deal with currency.

Therefore, in view of the above factors it becomes evident that soon more and more Banks will join the Metaverse universe, as after all, the Bank needs to be where their consumers are.


In the recent years the concept of Metaverse had gained huge traction in variety of industries, including Banking, with the introduction of Metaverse the Banking sector is on the threshold of a new decade of digital transformation.

The concept of Metaverse will eliminate the friction that existed in many digital platforms and will bring huge improvements in the Banking sector by influencing the way banks engage with their customers, invent new products and enable services.

Further, the future of Banking in Metaverse will depend on how well bankers, designers and security analysts are able to identify the elements and offer a unique customer experience to the future generations while preventing fraud and addressing concerns around privacy and data protection.

Further, it is clear that the Metaverse will become playground for the future generations the Demand for a trustworthy method to drive value exchange in the Metaverse will rise, as even though development in the technology allows the Metaverse to connect the real and virtual worlds, it also requires the economic system to thrive.

-Team AMLEGALS assisted by Mr. Rishav Kumar (Intern)

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