Optimism for the growth potential of metaverse technology continues to gain ground. Technavio, a U.K. headquartered technology research and advisory firm, has published a report forecasting that financial players will contribute as much as $50 billion to the market capitalization of the metaverse by 2026.
The report, titled “Metaverse Market in Finance by Component and Geography — Forecast and Analysis 2022–2026,” categorizes the global metaverse market in finance as a part of the global information technology (IT) spending market and analyzes its growth potential from both the software and hardware adoption viewpoints.
Technavio forecasts that by geographical segmentation, key players in North America finance will contribute the most to the advancement of metaverse adoption in the industry. The region is expected to account for 32% of the market’s growth, with the U.S. and Canada standing as the key market.
This does not rule out significant growth that is expected in Europe and the APAC region facilitated by the rising popularity and acceptance of digital assets and blockchain technology.
The report also expects that metaverse-related hardware will contribute significantly to the revenue generation forecast. These hardwares include headsets, smart glasses, and lenses used to interface with the augmented reality (AR) or virtual reality (VR) worlds of metaverse platforms.
“Factors such as the quick adoption of AR devices and VR headsets by banks and financial institutions to improve customer service and experience, the introduction of cutting-edge technology to speed up innovation in fintech solutions, and rising hardware developments are propelling the segment forward and thereby driving the metaverse market growth in finance,” the report said.
Despite the growth potential, the adoption of metaverse technology by the finance sector still faces challenges. The report notes factors such as privacy and security concerns, as well as the current concentration of vendors adopting the technology as some of these challenges.
Metaverse technology adoption expected to expand in other industries
The finance sector is not the only industry bullish on metaverse technology adoption. According to other reports by Technavio, the metaverse in fashion market share is expected to increase to $6.61 billion, while it is expected to reach $60.47 billion in the e-commerce market by 2026.
Reports from Bloomberg and JP Morgan early this year corroborate similar expectations of the massive expansion of the metaverse markets. Bloomberg forecasts that metaverse hardware and software adoption will boost the market to about $140 billion by 2025.
Meanwhile, banking giant JP Morgan believes the metaverse is a $1 trillion market that will “likely infiltrate every sector in some way in the coming years.”
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