Banking, Artificial Intelligence and Metaverse

We have heard the concepts of metaverse, artificial intelligence and machine learning very often. These concepts, which are very popular, used to only find their place in science fiction movies, but now they have become a part of our lives. These applications, which work in the background while shopping, doing research on the computer, deciding where to go on vacation, and much more, started to make our lives easier in finance and banking transactions.

Artificial intelligence basically makes the cost-centered approach to profit- centered in the financial field. In E&Y's press release dated February 20, 2020, artificial intelligence was identified as the most important driver of growth in the financial services industry. Artificial intelligence technologies stand out with their increasing emphasis on customer loyalty and satisfaction, their focus on customer experience, and their structure that automates all financial transactions.

According to McKinsey's September 19, 2020, 'AI-bank of the future: Can banks meet the AI challenge?' report, AI has the potential to unlock $1 trillion a year in value for banks. That's why banks have one of the largest value creation potential industries. Banks that want to create this value should turn into AI-first banks.

Artificial intelligence is used in the banking sector at a rate of 95% in the retail segment, 30%-40% in the SME segment, and almost 0% in the commercial corporate segment. If banks put their traditional structures into an innovative process and invest in artificial intelligence and machine learning, they can come to a stronger position in the future competitive war.

In banking, customers want their data to be kept securely, while performing transactions quickly and comfortably. Artificial intelligence technologies, which cause striking advances in both security and comfort, are making important developments in order to improve customer experience in banking and reduce operational costs of banks.

Automatic credit scoring, virtual assistants, chat-bot, face recognition systems, signature reality detection, emotion analysis of people, determination of which transaction customers will take from which channel and much more are the new innovations in the financial sector.

Thanks to automatic credit scoring, the credit score can be learned instantly instead of a time-consuming review process, both inspections and customer experience become faster with signature authenticity detection, and system security is much higher with the face recognition system. In addition to all these, the most prominent feature where artificial intelligence shines in the financial world: chat-bot.

While chat-bot technology is primarily a robotic process, as a result of natural language analysis, customers experience as if there is a human on the other side. While doing basic banking transactions via chat-bot, you can ask him about the words you don't know in the financial field. In the future, a company may have separate chat-bot technologies for each department. In this way, interdepartmental and intra-departmental transactions can be accelerated and costs can be minimized.

While artificial intelligence is so much in our lives, when we examine the concept of Metaverse that emerged with Web 3.0, it is seen that there is still much more uncertainty. Metaverse, by definition, refers to a virtual world where you can have fun, socialize and relax. In short, it is a combination of our physical and virtual lives. Blockchain technology, which has been on the agenda recently, has embodied the future place of this concept. Along with blockchain technology, cryptocurrencies and NFTs that can be used in the metaverse have entered our lives. Therefore, the finance and banking sector has started to prepare for significant changes. In the future, all banking transactions can be moved to the metaverse universe, and the meaning of banking that we are used to now may change completely, all physical transactions may disappear. NFT, blockchain technology and cryptocurrencies could become a part of banking. The first, largest and most notable breakthrough in finance was made by JPMorgan, the bank with the world's largest share value. He opened the first bank branch of the Metaverse universe with the name 'Onyx'. In the report he published, he called the economic activities carried out in the virtual universe 'meta-economy'. With this breakthrough, JPMorgan aims to enable game platform providers in the metaverse universe to perform financial transactions, prevent financial-level illegal transactions, create a suitable environment for easy commercialization, and scale the metaverse industry worldwide with multiple currencies and payment methods, thanks to bank-grade products and digital asset platform.