Metaverse Financial Services Market Size (2024 – 2030)

The global market for financial services within the metaverse witnessed a valuation of USD 81.61 billion in 2023 and is projected to attain USD 315.87 billion by 2030, with a compound annual growth rate (CAGR) of 21.33% from 2024 to 2030. Key factors driving the growth of market revenues over the forecast period include the swift adoption of metaverse initiatives by brokerage firms and banks to enhance business offerings, the rise of cryptocurrency as a substantial alternative financial system, and the increasing focus of fintech and smaller financial entities on enhancing their digital financial ecosystems.

Market Overview

Within the Metaverse, a blend of physical, augmented, and virtual shared space, users have the ability to transact virtual land, real estate, buildings, and other assets using digital currency. As prominent financial entities concentrate on merging the metaverse with their financial services, the metaverse is predicted to expand its commercial reach. The surge in blockchain and cryptocurrencies has amplified interest among individuals and businesses in establishing a digital presence and acquiring digital assets. Additionally, the metaverse holds potential in improving financial data management and refining the mechanisms for handling financial transactions provided by fintech companies. The emerging prospects within the financial sector have enabled fintech firms to capitalize on new financial requisites and construct novel forms of client interaction within the metaverse.

The Metaverse is anticipated to serve as a crucial digital platform for personal and business transactions, with major financial institutions channeling efforts towards developing their metaverse platforms as digital economies progress. For instance, NH Investment & Securities, a leading securities firm in South Korea, has disclosed intentions to establish NH Universe, its metaverse platform. Targeting millennials and Gen Z, the company aims to cater to approximately 2,000 consumers, offering diverse services such as investment analysis seminars through the extended metaverse platform from NH Investment's headquarters. Moreover, there has been a noticeable surge in the interest surrounding Virtual Reality (VR) technology for consumer engagement and training in recent years, coupled with an expanding acknowledgment of the technology.

Furthermore, the burgeoning interest in Virtual Reality (VR) technology for customer engagement and training has been significant, with a growing awareness of the immersive technology and its potential applications in the finance sector expected to propel revenue growth within the global metaverse financial market during the forecast period.

Several banks and financial institutions across the globe have commenced the integration of virtual reality (VR) or augmented reality (AR) into projects for various purposes, including fortifying client relationships, providing coaching and personalized guidance for enhanced performance, and delivering a robust digital customer experience within the virtual realm. The financial service landscape is swiftly transitioning towards digitized banking, which is poised to unlock new avenues for virtual bank development and contribute to market revenue growth in the forthcoming years. Another pivotal factor projected to fuel market expansion throughout the forecast period is the heightened collaboration between fintech firms and other financial institutions, aimed at establishing and fortifying their position within the metaverse.

Market Drivers

The escalating inclination towards utilizing cryptocurrency for purchasing digital assets within the metaverse is steering market growth.

Cryptocurrency serves as the currency of the metaverse, with each metaverse possessing its array of coins. These are utilized for transactions involving NFTs, virtual real estate, and avatar accessories, bridging the gap between the real and virtual realms. They facilitate the valuation of digital assets in terms of government-issued currency and their returns over time. The trend of using the metaverse for acquiring digital assets through bitcoin is gaining traction worldwide. Websites, messaging applications, and social media platforms like Facebook are becoming pivotal mediums for online interaction. The metaverse heralds the advent of novel online environments wherein interactions are more multidimensional, allowing individuals to engage more meaningfully with digital content rather than merely consuming it. Given the global availability of crypto on exchanges, investors stand to benefit by directly selling metaverse currencies and NFTs to interested buyers.

Expansive business-to-consumer (B2C) and business-to-business (B2B) prospects are propelling market momentum.

A standout feature of the metaverse is its ability to significantly expand consumer access to markets in emerging and frontier economies. The internet has already paved the way for access to goods and services previously out of reach. For instance, low-income earners may now secure employment in Western companies without the need for physical relocation. The cost-effective and impactful nature of virtual reality environments in education stands to enhance educational opportunities. However, these advancements necessitate clear governance. Business-to-business (B2B) marketing activities such as trade shows, product demonstrations, client meetings, customer service, and advertising stand to undergo substantial transformation owing to the metaverse. Given that many B2B offerings are commodities, exceptional customer service can either make or break a business. The convergence of B2B and B2C realms represents an intriguing facet of the Metaverse, offering companies the opportunity to expand their traditional customer bases while staying aligned with their corporate ethos.

Market Restraints

The looming threat of cyber-based attacks targeting the metaverse poses a significant impediment to business expansion.

Virtual Reality (VR), Augmented Reality (AR), the Internet of Things (IoT), and cryptocurrencies are poised to be integral components of the final iteration of the metaverse, albeit potentially different from the current vision. These technologies hold the promise of bridging the physical and digital worlds, harmonizing them. However, they also open new avenues for fraudsters to target both businesses and individuals. Concerns surrounding data security and privacy within metaverse environments, apprehensions regarding user identity, and the challenge of persuading consumers to engage with payment services within these settings are all anticipated to somewhat hinder the revenue growth of the global metaverse market during the forecast period.

The Challenges of Establishing a Unified System for Verifying Virtual Asset Ownership pose a hurdle to market progress.

The obstacles to creating a unified virtual environment wherein users can interact with humans, avatars in the real world and other locations, and purchase and possess diverse products and assets are manifold. The burgeoning popularity of NFTs is attracting a growing number of investors and users towards owning digital assets and tokens. A primary challenge lies in developing a standardized mechanism for validating ownership of virtual assets within the metaverse, akin to the existing use of NFTs for granting and verifying ownership rights for art, music, films, and other entities.

Segmentation Analysis

Metaverse Financial Services Market - By Component:

• Infrastructure
• Software Solutions

The global metaverse market has been segmented into infrastructure and software solutions based on component types. Under the software solutions segment, there are sub-segments such as asset creation tools and programming engines. Meanwhile, the infrastructure segment includes sub-segments like VR and AR headsets, as well as Extended Reality (XR) hardware. Projections indicate that the software solutions segment will continue to hold a significant portion of the market's revenue.

The hardware segment is poised for growth, fueled by the widespread adoption of AR devices and VR headsets within banks and financial institutions to enhance customer service experiences. Additionally, the integration of cutting-edge technologies to drive innovations in fintech solutions, alongside advancements in metaverse hardware, is expected to contribute to the revenue surge in this segment over the forecast period.

Metaverse Financial Services Market - By Technology:

• Blockchain
• Metaverse Wallets
• Virtual Assistants
• Non-Fungible Tokens (NFTs)

The global metaverse in the finance market is categorized into blockchain, metaverse wallets, virtual assistants, and Non-Fungible Tokens (NFTs) based on technology. Among these, the blockchain segment is projected to lead in revenue generation owing to the increasing adoption of cryptocurrency as the primary currency within the metaverse. Additionally, the use of blockchain technology for creating smart contracts and facilitating instant, secure financial transactions is a key driver. The versatile applications of blockchain within the metaverse, combined with ongoing advancements in metaverse crypto projects, are expected to sustain growth in this segment. Blockchain technology offers digital proof of asset ownership in the virtual realm and enhances compatibility and interoperability across various metaverse domains. These advantages underscore the potential for accelerated growth of blockchain and crypto initiatives within the metaverse in the coming years.

In 2021, virtual assistant technology accounted for over 35.0 per cent of total revenue. The continued rise in the use of virtual assistants for enhanced participation within the metaverse is projected to drive the technology segment 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 segmented into various end-users, including brokerage firms, investment banks, financial institutions, fintech companies, digital asset management firms, financial advisory companies, and commercial banks. The segment with the most significant growth potential is investment banks, primarily due to their rapid adoption of metaverse technology. Investment banks are increasingly leveraging metaverse technologies to enhance customer experiences, develop dedicated metaverse platforms, establish virtual branches, and provide specialized training for their staff. Notably, Bank of America has announced plans to offer virtual reality training to its employees globally, showcasing the industry trend towards immersive technologies.

Metaverse Financial Services Market - By Region:

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

Regional analysis indicates that North America is poised to hold the largest revenue share over the forecast period. This is attributed to the rising adoption of VR and AR technologies by financial institutions, growing acceptance of cryptocurrencies and blockchain technology, increased focus on enhancing customer experiences through immersive technologies, and the swift uptake of metaverse platforms across financial services and businesses.

The Asia-Pacific region is expected to witness substantial revenue growth, driven by the proliferation of metaverse platforms among banks and financial companies, adoption of metaverse technology to modernize business models, establishment of virtual metaverse branches, and the increasing acceptance of cryptocurrencies and blockchain. For instance, Shinhan Bank Co. Ltd. in South Korea has embarked on metaverse-themed projects to launch its virtual banking branches and offer financial education. The region's embrace of metaverse technology is anticipated to fuel market growth significantly in the coming years.

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.

These are prominent firms featured in the global metaverse in finance market research.

Recent Developments in Metaverse Financial Services Market

EXPANSION:

• In January 2022, Mogo, Inc., a digital payments and financial technology firm, announced its entry into the metaverse with an investment in NFT Trader, a Canada-based startup offering a peer OTC trading platform for NFTs. Following this announcement, Mogo Inc.'s stock rose by 4%.

PARTNERSHIPS AND COLLABORATIONS:

• In January 2022, Soldex.ai, a leading platform in the next generation of Defi evolution, partnered with Project Larix. Project Larix is a lending and borrowing protocol based on the Solana blockchain, renowned for its robust risk management protocols utilizing NFTs, crypto tokens, and other assets as collateral.
• In November 2021, Tencent Holdings Ltd. established a partnership with The Asian Institute of Digital Finance. This collaboration aims to bolster Asia's fintech industry through joint efforts in education, research, and entrepreneurship.

COVID-19 Impact on Metaverse Financial Services Market

The COVID-19 pandemic played a pivotal role in popularizing the concept of the metaverse. With remote work and online education becoming the norm, there was a heightened need for practical channels to facilitate online communication. This awareness among consumers and businesses alike accelerated the development of metaverse technologies, with significant investments announced by tech companies around 2020.

Experts note that the pandemic served as a catalyst for metaverse technologies, and the post-pandemic landscape is expected to witness increased customer interest. Virtual online communities have emerged as essential lifestyle spaces, especially for those constrained by the pandemic. Overall, the COVID-19 pandemic has had a favorable impact on the metaverse market, bolstering sectors such as digital assets, blockchain, and Non-Fungible Tokens (NFTs).