Banks punting on Metaverse carbon reduction

Based on its latest Metaverse Benchmark for Banking report, the findings reveal that while 91 per cent of Australian banking executives are hedging their bets on the metaverse to reduce their organisation’s carbon footprint, 67 per cent of them believe the metaverse may also have “negative consequences on their carbon footprint”. 

The inaugural global benchmark report provided a state-of-play on industry sentiments in Australia in comparison to the UK, US and Netherlands. 

In assessing the potential impact of the metaverse in meeting sustainable banking targets, the report also revealed:

- More than half of Australian banks (55 per cent) are already engaging in technologies for the Metaverse, with the remaining majority (39 per cent) confirming they have plans to do so;

- More than eight in 10 (84 per cent) Australian banking executives already have plans in place to address the environmental impact of the Metaverse’s energy needs. 

Overall, Metaverse Benchmark for Banking - commissioned by Mobiquity and conducted by Censuswide - revealed nine in 10 Australian banks believe the metaverse will be an important tool in lowering their carbon footprint.

More than half of Australian banks (55 per cent) are already investing in technologies for the Metaverse, with the remaining majority (39 per cent) confirming they have plans to do so. 

More than eight in ten (84 per cent) already have plans in place to address the environmental impact of the Metaverse’s energy needs, it discovered.

A new world of potential for banks

Mobiquity in APAC general manager Gustavo Quiroga said the metaverse creates "a whole new world of potential" for banks and financial institutions to not only meet sustainability initiatives, but also enhance the customer experience beyond traditional channels.

“The Metaverse provides a unique opportunity for banks and financial institutions to become greener by decreasing their carbon footprint with new processes and services in a virtual realm,” he explained.

“The obvious use case here is looking into how banks and financial institutions can streamline the flow of identity verification that customers are repeatedly asked to provide.

“If processes such as this were digitised through a vetted data system, such as self-sovereign identity, it would help eliminate physical information processing and the carbon impact associated with such operations,” Mr Quiroga said. 

“It’s important to remember that if the experience isn’t any better than it is in the physical world, we will never see a mass adoption of the metaverse,” he added.

“Moreover, to be effective from an ESG perspective [Environmental, social governance], banks must assess their user experience from start to finish and see what elements can be streamlined to not only increase customer satisfaction, but also decrease their carbon footprint.

“It’s a balancing act that holds the future of the metaverse at stake.

“Our research shows that most Australian banks are looking at adopting, or have already implemented, metaverse technologies in some shape or form.

“This is a great step in the right direction as when banks are able to facilitate commerce-led activities through a metaverse infrastructure there will undoubtedly be benefits to reducing carbon footprints and meeting ESG targets,” Mr Quiroga stated.

Interestingly, the report revealed that smaller banks across Australia are adopting metaverse technology over larger institutions.

It suggests this is largely due to their smaller infrastructure, fewer employees, and inevitably a simpler bureaucracy, which makes it easier for them to adopt and implement metaverse initiatives with minimal business disruption.

An essential component of financial services

Mobiquity vice president of engineering and chief technology officer, Jieke Pan, said the question of whether the Metaverse will ‘live or die’ as a concept in the banking sector, “…falls down to its relevance and integration into the technology stack.”

“The only way Metaverse technologies in the banking sector are likely to succeed is if they become an essential component of the financial services technology stack,” he explained.

“The Cloud, for example, has become the standard host and single source of truth for banks’ CRM and other systems on a global scale.

“Metaverse may never get to that level of maturity, or grow into that type of critical ecosystem, but only time will tell,” said Mr Pan.

Mobiquity, part of Hexaware, works with banks across Asia Pacific including Standard Bank, Citi Bank, Bank of Sydney and ME Bank to create successful digital products that are rooted in human behaviour, emotions and needs, it explained.

The company recently launched a new Metaverse Immersion Program to help businesses understand the emerging platform and how it can be leveraged to drive business value.

The research was conducted by the independent UK market research company Censuswide, with 602 C-suite banking executives 18+ across the UK, the Netherlands, the US and Australia (29.04.2022 - 16.05.2022).

Censuswide abide by and employ members of the Market Research Society, which is based on the ESOMAR principles, it confirmed.

[Related: https://www.theadviser.com.au/tech/43423-metaverse-could-boost-property-sales-efficiency]