Banking sector 2022/2023

The Metaverse, powered by META (formerly Facebook), offers the exciting opportunity to experience the physical world in the digital space. For banks, this opens up the opportunity to customise their offering even better to the needs of customers, improve the customer experience and establish an even closer connection with them. Employees can also be trained virtually for customer contact. One example of this is BnP Paribas, which uses a VR app to enable its customers to experience the steps of a property purchase in a virtual reality environment. German banks such as DZ BANK are also investigating the introduction of a metaverse in their organisation.

The Internet of Payments, also known as the concept of digital money, makes it possible in the long term for machines to initiate and process transactions independently. This opens up the possibility of implementing digital business models as the number of "Internet of Things" devices and intelligent machines continues to rise. For this reason, the ECB launched a two-year evaluation phase last year to develop the "digital euro". Although the trend is promising and pioneering, the necessary legal, technical and social framework conditions are still lacking.

Artificial intelligence has developed from a hype topic to an established topic. Companies such as BMW and Siemens as well as banks such as Deutsche Bank are integrating AI into their daily business operations. Thanks to applications such as ChatGPT, AI is on everyone's lips, especially this year. In the face of cost pressure and increasing customer demands, AI offers banks the opportunity to make processes more efficient, reduce costs and improve personalisation in customer contact, to name just a few of the many benefits.

The platform economy offers various advantages for both customers and companies: Thanks to open banking approaches such as PSD2.0 (Payment Service Directive), it offers the opportunity to not only use an application on a platform - but also, for example, to chat with the family or buy groceries in the banking app and thus save time. Companies can thus reinforce the importance of their role for the customer by offering them this option.

In countries such as China (Alipay, WeChat), the platform economy is already firmly established in the financial sector. However, US companies such as Amazon are also increasing the pressure by expanding their platforms. The first European FinTechs are picking up on the trend and are now offering comprehensive platform solutions. The engagement banking platform from fintech Backbase in Amsterdam, the Netherlands, is one such solution. This solution aims to put the customer at the centre in order to offer them outstanding digital experiences by integrating retail, wealth management and other sectors as well as completely new processes ("engagement banking platform"). For German banks, however, there is a risk of missing out on this trend or not actively responding to it and thus losing customer loyalty. The German market is aware of this challenge and is now responding to it. This is demonstrated by the discussions held by leading industry representatives at the Frankfurt School's recent annual conference on "Next generation financial services providers". Aareal Bank, for example, which offers a platform for housing companies with links to tenants, insurance companies, landlords, etc., currently stands out.