Global: UK Banks Shift Focus Away from Metaverse Investments

The enthusiasm among UK banks for investing in technologies related to the Metaverse, such as virtual reality (VR) and augmented reality (AR), is dwindling as the initial hype around the concept subsides.

In the aftermath of Facebook’s rebranding as Meta in 2021, many financial services firms rushed to explore opportunities within the Metaverse. A 2022 report from Citi even predicted that the Metaverse economy could reach a value of up to $13 trillion by 2030.

However, the concept of the Metaverse has struggled to gain traction, leading to a shift in focus within the financial services sector, according to a survey of 150 UK banking executives conducted by Censuswide on behalf of Hexaware Mobiquity.

The survey found that the number of UK banks investing in technologies like VR and AR in preparation for entry into the Metaverse has decreased by almost one-third over the past year. While over half of UK banks were exploring these technologies a year ago, only 38% are doing so in 2023.

When asked about their top priorities in engaging with emerging technologies and tools, nearly a quarter of respondents mentioned cybersecurity, 22% highlighted cloud technologies, and 21% pointed to Open Banking APIs.

Despite these priorities, the research indicates that UK banks are lagging behind their global counterparts in adopting Generative AI, with only 13% of them engaging with ChatGPT, compared to 19% of banks worldwide.

Peter-Jan Van De Venn, Vice President of Global Digital Banking at Hexaware Mobiquity, noted that the landscape is evolving rapidly. He stated, “While many UK banks were exploring the Metaverse last year, the urgency of these initiatives has been superseded by more pressing requirements that have evolved over the past 12 months.”

The survey also revealed that 41% of UK banks are developing data visualization tools to enhance stakeholder engagement and understanding of environmental, social, and governance (ESG) risks and opportunities, while 37% are using machine learning and AI to identify and monitor ESG-related factors.

Van De Venn emphasized, “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.”