The digital and physical world as we know it, is once again being reimagined and facilitated by virtual and augmented reality. A product of this reimagination – the Metaverse offers users an interactive, stimulating, virtual, unified experience all from the convenience of their couch.
Metaverse gained mainstream popularity when Facebook about a year ago made a very public declaration and expression of interest to invest $ 10 billion to work on technologies to a metaverse and build it out. Since then, several industries have begun to experiment in the space, with estimates of the addressable market and revenue widely differing where J.P Morgan estimates the market opportunity to be over $ 1 trillion in yearly revenues, McKinsey & Company projecting potential of about $5 trillion by 2030 and Citi putting the metaverse economy to be anywhere between $8 trillion and $13 trillion by 2030.
With vastly differing estimates, one detail is evident – opportunities and use-cases for the Metaverse while still nascent offer a significant revenue share for businesses. Some immediate success can be achieved by acquisition of Gen-Z customers, hiring and training practices, marketing, branding and monetising intellectual property. It is inevitable that, sooner or later, the metaverse is going to become another channel through which banks can engage both customers and employees. Here are some of the banks currently exploring opportunity that metaverse has to offer:
Kookmin Bank (KB) in South Korea was one of the first to launch virtual branches where customers can talk to financial advisers, access personal financial information to conduct virtual banking service and transactions such as remittances. The bank plans to scale its services to include one-on-one consultations between customer and employee avatars, educate young people on finance as well as training employees.
HSBC and The Sandbox, a leading decentralized gaming virtual world and subsidiary of Animoca Brands, partnered to engage with global financial services providers and sports communities in The Sandbox metaverse. This partnership saw HSBC buy a plot of virtual real estate for an undisclosed sum.
In addition to its own foray into the metaverse, HSBC launched a fund to capture investment opportunities in the metaverse for its wealthy clients in Hong Kong and Singapore that will focus on investing within the metaverse ecosystem across five segments – infrastructure, computing, virtualisation, experience and discovery, and interface.
imaginLAND, a metaverse extension of imagin, the digital services and lifestyle platform backed by CaixaBank aims to run initiatives in the virtual reality universe and will be available to its entire community of users. Users can access content linked to culture, creativity, technology, and sustainability.
Other Leaders looking to foray into the Metaverse
Payments giant American Express could be preparing to enter the metaverse as per trademark applications show. They filed trademark applications for its logos and items including the Centurion black card and “Shop Small” program. Amex is also considering a move into virtual payments and electronic business transactions for digital media and non-fungible tokens.
Mastercard is preparing for the metaverse economy by applying for 15 trademarks applications for a virtual world powered by crypto, fintech, and metaverse eCommerce technologies. Apart from this NFT backed media, payment processing services in the metaverse, marketplaces for digital goods NFTs, and eCommerce transactions in the metaverse are also part of the applications.
With most players in the financial services industry looking to enter the metaverse sooner rather than later, the value creation and opportunity can be boundless.