Financial services firms scrambled to pursue the Metaverse in the wake of Facebook's 2021 rebranding as Meta. A 2022 Citi report predicted that the Metaverse economy could be worth up to $13 trillion by 2030.

Yet, the concept has failed to gain traction and the FS sector has begun to move away, according to a survey of 150 UK banking executives conducted by Censuswide for Hexaware Mobiquity.

The number of UK banks investing in technologies such as VR and AR in preparation for entering the Metaverse dropped by nearly a third in the past year. More than half of UK banks were investing in these technologies 12 months ago, compared to just 38% in 2023.

Asked which emerging technologies and tools they’re engaging with as a priority, almost a quarter cite cybersecurity, with 22% pointing to cloud and 21% highlighting Open Banking APIs.

However, the research shows that UK banks are lagging behind the rest of the world on Generative AI adoption, with just 13% of them engaging with ChatGPT, compared to 19% of global banks.

Peter-Jan Van De Venn, VP, global digital banking, Hexaware Mobiquity, says: “The landscape is shifting constantly, underlined by the fact that while many UK banks were exploring the Metaverse last year, the urgency of these initiatives has been superseded by more pressing requirements that have evolved over the past 12 months."

Meanwhile, 41% of UK banks are developing data visualisation tools to improve stakeholder engagement and understanding of ESG risks and opportunities and 37% are using machine learning and AI to identify and track ESG risks and opportunities.

Says Van De Venn: “Technology is playing an increasingly central role in ESG, helping banks continue to work towards their environmental and social responsibility goals. This can put them on track to address global environmental challenges, unlocking a greener future for financial services."