UK banks losing interest in metaverse

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The enthusiasm among UK banks for technologies like virtual reality (VR) and augmented reality (AR) has waned as the initial excitement around the Metaverse concept has faded.

Following Facebook’s rebrand as Meta in 2021, financial services firms rushed to explore opportunities within the Metaverse. In 2022, a Citigroup report even projected the Metaverse economy could be valued at up to $13 trillion by 2030.

However, the concept hasn’t gained the expected momentum, and the financial sector is shifting its focus, according to a survey of 150 UK banking executives conducted by Censuswide for Hexaware Mobiquity.

Over the past year, the number of UK banks investing in technologies like VR and AR for potential Metaverse entry has declined by nearly one-third. A year ago, more than half of UK banks were investing in these technologies, but that number has dropped to 38% in 2023.

When asked about their priority technologies, almost a quarter of respondents mentioned cybersecurity, with 22% focusing on cloud computing, and 21% highlighting Open Banking APIs.

However, the research indicates that UK banks are trailing behind their global counterparts in adopting Generative AI, with only 13% engaging with technologies like ChatGPT, compared to 19% of banks worldwide.

“The landscape is shifting constantly, underlined by the fact that while many UK banks were exploring the Metaverse last year, the urgency of these initiatives has been superseded by more pressing requirements that have evolved over the past 12 months,” says Peter-Jan Van De Venn, VP, global digital banking, Hexaware Mobiquity.

Meanwhile, 41% of UK banks are working on data visualization tools to enhance stakeholder engagement and better understand environmental, social, and governance (ESG) risks and opportunities. Additionally, 37% are using machine learning and AI to identify and monitor ESG-related risks and opportunities.

“Technology is playing an increasingly central role in ESG, helping banks continue to work towards their environmental and social responsibility goals. This can put them on track to address global environmental challenges, unlocking a greener future for financial services,” says Van De Venn.

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