Metaverse Financial Services Market Size (2023 – 2030)

The global metaverse financial services market was valued at USD 67.26 billion in 2022 and is estimated to reach USD 315.87 billion by 2030 growing at a CAGR of 21.33% from 2023 to 2030. Over the forecast period, key factors expected to drive market revenue growth include the rapid adoption of metaverse initiatives by brokerage companies and banks to improve business offerings, the emergence of cryptocurrency as a large-scale alternative financial system, and the growing focus of fintech and smaller financial companies on developing their digital financial ecosystems.

MARKET OVERVIEW

Users can buy and sell virtual land/real estate, buildings, and other assets using digital currency in the Metaverse, which is a fusion of physical, augmented, and virtual shared space. As significant financial businesses focus on integrating the metaverse with their financial services, the metaverse is projected to develop and extend its commercial scope. The growing popularity of blockchain and cryptocurrencies has increased people's and businesses' interest in establishing a digital presence and acquiring digital assets. The metaverse can also help with financial data management and improve the mechanisms for managing financial transactions that fintech businesses provide. Fintech firms have been able to leverage new financial requirements and build new types of client contact in the metaverse because of emerging prospects in the financial sector.

Metaverse is predicted to be a critical digital platform for personal and business transactions, and major financial institutions are focusing on developing their metaverse platforms as digital-based economies accelerate. For example, NH Investment & Securities, one of South Korea's top securities businesses, has announced plans to build NH Universe, its metaverse platform. Millennials and Gen Z are the company's target audience for this campaign. Around 2,000 consumers will be able to engage and use various services such as investment analysis seminars thanks to the metaverse platform, which will be extended from NH Investment's headquarters. In addition, there has been a considerable surge in interest in Virtual Reality (VR) technology for consumer contact and training in recent years, as well as expanding awareness of the technology.

Furthermore, interest in Virtual Reality (VR) technology for customer interaction and training has risen significantly in recent years, and growing awareness of the immersive technology and its potential application in the finance sector is expected to drive revenue growth in the global metaverse in finance market over the forecast period.

Several banks and financial institutions around the world have begun implementing virtual reality (VR) or augmented reality (AR) in projects for a variety of purposes, including strengthening client relationships, providing coaching and personalised guidance to improve performance, and providing a robust digital customer experience in the virtual world. Financial service providers are fast shifting toward digitised banking, which is likely to offer up new potential for virtual bank development and contribute to market revenue growth in the future. Another important factor projected to fuel market expansion over the forecast period is increased cooperation between fintech companies and other financial institutions to establish and improve their position in the metaverse.

MARKET DRIVERS

The increasing desire for the use of cryptocurrency to purchase digital goods on the metaverse is driving the market

A cryptocurrency is the metaverse's currency, and each metaverse has its collection of coins. They're used to paying for NFTs, virtual real estate, and avatar shoes. Cryptocurrencies are utilised to bridge the gap between the real and virtual worlds. They enable us to calculate the value of digital assets in terms of government-issued currency, as well as their returns over time. The usage of the metaverse to purchase digital assets using bitcoin is becoming more popular around the world. Websites, messaging applications, and social media platforms such as Facebook are being used to communicate with one another online. The metaverse is the advent of new online environments in which people's interactions are more multidimensional and they can engage more meaningfully with digital content rather than just reading it. Because crypto is available on exchanges all over the world, investors can profit by selling metaverse currencies and NFTs to buyers directly.

Expanded business-to-consumer (B2C) and business-to-business (B2B) prospects are moving the market forward

One of the metaverse's most intriguing features is that it greatly expands consumer access to the marketplace in emerging and frontier countries. The Internet has already provided access to goods and services that were before unavailable. Low-income workers, for example, may now be able to get jobs in western firms without emigrating. Because virtual reality environments are a low-cost and effective way to learn, they will help to improve educational possibilities. As a result of these developments, clear governance will be required. Trade shows, product demonstrations, client meetings, customer service, and advertisements are all examples of business-to-business (B2B) marketing. . Each of these things can now be substantially altered thanks to the metaverse. Because many B2B items are commodities, excellent customer service may make or break your business. The merging of B2B and B2C divisions is an interesting side effect of the Metaverse. Companies can use this to expand their traditional customer bases while staying true to their corporate values.

MARKET RESTRAINTS

The potential of cyber-based attacks on the metaverse is a major problem that is stifling business expansion

Virtual Reality (VR), Augmented Reality (AR), the Internet of Things (IoT), and cryptocurrencies will undoubtedly be used in the metaverse's final implementation, even if it differs from today's vision. These technologies have the potential to bring the physical and digital worlds together and synchronise them. However, they will open up new avenues for fraudsters to target businesses and individuals. Concerns regarding data security and privacy in metaverse environments, concerns with the user identity, and the difficulty of persuading consumers to use payment services in these settings are all projected to hamper global metaverse market revenue development to some extent during the forecast period.

The Challenges of Creating a Unified System to Verify Virtual Asset Ownership are hampering the market

The obstacles to creating a unified virtual environment in which users may interact with humans and avatars in the real world and other locations, as well as purchase and possess various products and assets, are numerous. NFTs are steadily gaining popularity, attracting more investors and users to own digital assets and tokens. The main problem would be to develop a standardised mechanism for validating the owners of virtual assets in the metaverse, similar to how NFTs are already used to give and verify rights of ownership for art, music, films, and other items.

METAVERSE FINANCIAL SERVICES MARKET REPORT COVERAGE:

Segmentation Analysis

Metaverse Financial Services Market - By Component:

• Hardware
• Software

The worldwide metaverse market has been divided into software and hardware segments based on component types. Asset creation tools and programming engines are sub-segments of the software segment. VR and AR headsets and Extended Reality (XR) hardware are sub-segments of the hardware segment. Over the projected period, the software segment is expected to maintain its revenue share.

The rapid adoption of AR devices and VR headsets across banks and financial institutions to improve customer service and experience, the introduction of cutting-edge technologies to accelerate innovations in fintech solutions, and increasing advancements in metaverse hardware are all expected to drive revenue growth in the hardware segment over the forecast period.

Metaverse Financial Services Market - By Technology:

• Blockchain
• Metaverse Wallets
• Virtual Assistants
• NFT

The global metaverse in the finance market has been categorised into the blockchain, metaverse wallets, virtual assistants, and Non-Fungible Tokens based on technology (NFT). The blockchain segment is expected to generate the most revenue over the forecast period, owing to the growing adoption of cryptocurrency as the metaverse's primary currency and the increased use of blockchain technology to create smart contracts and conduct instant and secure financial transactions. In the metaverse, blockchain technology is predicted to have a variety of uses, and consistent progress in metaverse crypto projects is projected to sustain revenue growth in this category. Blockchain provides digital proof of ownership of virtual assets and can improve compatibility and interoperability between different areas in the metaverse. The advantages and value that blockchain provides in the metaverse are crucial aspects that can help metaverse blockchain and crypto initiatives grow faster in the next years.

In 2021, virtual assistant technology accounted for more than 35.0 per cent of total revenue. Because of the rising use of VA to participate more proficiently in the metaverse, the technology segment in the global market is expected to grow at a CAGR of 40.4 per cent over the forecast period.

Metaverse Financial Services Market - By End-User:

• Brokerage Firms
• Investment Banks
• Financial Institutions
• Fintech Companies
• Digital Asset Management Companies
• Financial Advisory Companies
• Commercial Banks

The global metaverse in the finance market is divided into brokerage firms, investment banks, financial institutions, fintech firms, digital asset management firms, financial consulting firms, and commercial banks based on end-use. The investment banks segment is expected to grow strongly over the forecast period, owing to major investment banks around the world rapidly adopting metaverse technology to improve customer experience, banks' increased focus on developing their metaverse platforms, increased investment to develop virtual metaverse branches, and increased use of metaverse technologies to improve customer investment experiences. Furthermore, investment banks are utilising metaverse technology to equip their staff with training and other expertise. For example, Bank of America has announced intentions to offer virtual reality training to its employees worldwide.

Metaverse Financial Services Market - By Region

• North America,
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa

According to regional analysis, North America is expected to account for the largest revenue share over the forecast period, owing to increasing adoption of VR and AR technologies by financial institutions and banks, growing popularity and acceptance of cryptocurrencies and blockchain technology, increased focus on improving customer experience and exploring the potential of immersive technologies, and rapid adoption of metaverse platforms to align financial services and businesses with emerging technologies.

The increasing number of banks and financial companies developing their metaverse platforms, growing adoption of metaverse technology by brokerage firms, banks, and credit card insurers to update their business models, rapid acceleration of digital-based economies, and growing acceptance of cryptocurrencies and blockchain technology are all expected to drive revenue growth in the Asia Pacific over the forecast period. . For example, South Korean bank Shinhan Bank Co. Ltd. has adopted metaverse-themed projects and wants to establish its metaverse platform to provide virtual banking branches and financial education. The increasing implementation of metaverse technology in Asia Pacific countries is estimated to fuel market revenue growth in the region over the forecast period.

Key Market Players

1. Bank of America
2. BNP Paribas
3. National Bank of Kuwait
4. Kookmin Bank
5. Shinhan Bank
6. IBK Investment & Securities
7. NH Investment & Securities
8. Mogo, Inc. are some of the prominent firms featured in the worldwide metaverse in finance market research.

NOTABLE HAPPENINGS IN METAVERSE FINANCIAL SERVICES MARKET IN THE RECENT PAST

EXPANSION:

• In January 2022, Mogo, Inc., a digital payments and financial technology business, revealed plans to enter the metaverse with an investment in NFT Trader, a Canada-based startup that offers the peer OTC trading platform for NFTs. Following the release, Mogo Inc.'s stock increased by 4%.

PARTNERSHIP AND COLLABORATIONS:

• In January 2022, Soldex.ai, a platform leading the next generation of Defi evolution, announced a partnership with Project Larix. Project Larix is a lending and borrowing protocol based on the Solana blockchain that has created robust risk management protocols using NFTs, crypto tokens, and other assets as collateral.
• In November 2021, Tencent Holdings, Ltd established a partnership with The Asian Institute of Digital Finance. To boost Asia's fintech industry, the corporations will collaborate in the areas of education, research, and entrepreneurship.

COVID-19 impact on Metaverse Financial Services Market

The COVID-19 pandemic was essential in generating interest in the metaverse concept. People began working from home, and students began attending lessons online, necessitating the development of practical procedures or channels to make online communication more attainable. Consumers and businesses alike have been more aware of the pandemic as a result of it. Tech companies began developing this technology and announcing their investments around the year 2020. The year 2021 was a good one for Metaverse technology investments, thanks to the billion dollars spent by the company (Facebook).

The COVID-19 pandemic turbocharged metaverse technologies, according to industry experts, and the post-pandemic climate is expected to boost customer interest. The pandemic has hastened the development of virtual online communities as important lifestyle areas for those who have been restricted due to the disease. The COVID-19 pandemic has had a favourable impact on the metaverse market, which could help a variety of sectors. The popularity of the metaverse is growing thanks to the growth of digital assets, blockchain, and Nonfungible Tokens (NFTs).