The number of UK banks investing in technologies such as virtual reality (VR) and augmented reality (AR) is declining as interest in the Metaverse diminishes.
Following Facebook’s 2021 rebranding as Meta, financial services firms rushed to explore the Metaverse. A 2022 report from Citi estimated that the Metaverse economy could reach up to $13 trillion by 2030. However, the concept has struggled to gain traction, leading the financial services sector to pivot away from it, as revealed by a survey of 150 UK banking executives conducted by Censuswide for Hexaware Mobiquity.
In the past year, the percentage of UK banks investing in VR and AR technologies has dropped by nearly a third. While over half of these banks were exploring such technologies a year ago, that number has dwindled to 38% in 2023.
When asked about their key priorities in emerging technologies, nearly 25% of executives highlighted cybersecurity, with 22% focusing on cloud solutions and 21% emphasizing Open Banking APIs.
Despite this technological focus, UK banks are falling behind in the adoption of Generative AI, as only 13% are utilizing tools like ChatGPT, compared to 19% of banks globally.
Peter-Jan Van De Venn, Vice President of Global Digital Banking at Hexaware Mobiquity, noted that the landscape is continuously evolving. He commented, “While many UK banks were exploring the Metaverse last year, the urgency of these initiatives has been overshadowed by more pressing needs that have developed over the past 12 months.”
In terms of Environmental, Social, and Governance (ESG) efforts, 41% of UK banks are creating data visualization tools to enhance stakeholder engagement and improve understanding of ESG risks, while 37% are employing machine learning and AI to identify and monitor these risks and opportunities.
Van De Venn added, “Technology is increasingly crucial in advancing ESG initiatives, enabling banks to progress toward their environmental and social responsibility goals and contribute to addressing global environmental challenges, paving the way for a greener future in financial services.”