What are financial services doing about the metaverse so far?

Whilst it’s still early days for the concept of the metaverse (heck, we still don’t have an agreed upon definition!) there’s plenty of individuals, brands and organisations exploring how they can build experiences in and utilise the benefits of the metaverse. The media stories tend to dominate with consumer facing brands and crypto native projects but there’s already been some TradFi’s taking their first steps into the metaverse.

This is perhaps surprising, given that most financial institutions were slow on the uptake of crypto and many of them were full out sceptics about the technology, use cases and legitimacy of the industry as a whole (November has certainly given them some more ammo on this!). However it seems that they’re more bullish on the concept of the metaverse so let’s explore three high level categories of what TradFis are doing within the metaverse …

💰MetaFinance

This represents institutions offering financial services directly IN the metaverse. This could be a conversation with a support agent within a bank branch in Decentraland, the ability to arrange a loan whilst wandering through Roblox or getting a mortgage on your metaverse real estate.

Think of MetaFinance as an extension to digital banking.

Whilst this may seem far fetched, I’m sure the concept of getting a mortgage without visiting a branch or the idea of facetime with your banking relationship manager instead of going in for a face to face meeting would have seemed an impossibility just a few years ago.

So what TradFis are exploring MetaFinance?

• KB Koomin Bank (South Korea’s biggest bank) is said to be developing a metaverse VR branch which will enable customers to access banking services in the metaverse, have 1-on-1 conversations and be used for training and education purposes.
• In March Amex filed trademarks for a virtual marketplace and crypto services; including card payment services, an ATM, banking and fraud detection services and even a concierge service for virtual visitors.
• Quontic bank has a branch in Decentraland with teller, posters, links to their website and even an interactive ATM which allows you to access a pool party and receive an NFT. It’s maybe a far cry away from your typical bank visit but shows that TradFis are already thinking about making their spaces engaging for the gen z and alpha visitors.

📱Engagement with Digital Natives

My gran doesn’t trust internet banking. She’ll use telephone banking at a push but really she wants to visit a branch and have a face to face interaction before she moves her finances around.

Gen alpha to millennials on the other hand don’t want to have to speak to someone, they want to be able to access their account, apply for a loan, send some money, all quickly and efficiently and ideally without any human involvement.

These are the digital natives who will soon be the global workforce and leaders of the business world and it’s important that the banking services we have cater to their preferences in just the same way that banks are keeping even just a handful of branches around for the boomers who can’t or refuse to use internet banking.

When we think about what this means for the metaverse, we can draw some very clear parallels with the growth of social media for TradFis. Initially banks laughed at the idea of a social media presence but quickly they realised the power Twitter, Instagram and now even TikTok have for building brand recognition, enhancing their reputation and engaging with their digital savvy customer base. I expect that we’ll therefore see more TradFis entering the metaverse in order to connect with digital natives and that the metaverse as a channel will become as critical as social media is today.

So what TradFis are using the metaverse to engage digital natives?

• In March 2021 HSBC acquired land within The Sandbox and began to build out experiences themed around sport and gaming in an effort to engage their younger customer base. I’ve visited their space and it’s a gameified area where you have to try to complete various quizzes and mini challenges all themed around the HK Rugby 7s. There’s a strong focus on learning with plenty of information about their support of the 7s and the sustainability angle but also a fun element with the opportunity to take a little boat ride and try to outrun a digital field of rugby players in order to score a try.

• JP Morgan’s space in Decentraland has been well publicised and whilst they made a questionable decision to swap out the tiger with an owl (why?!) it does contain various videos and links out to sources with more information about their crypto related efforts. It’s certainly not going to be a location you visit every day but is a good example of a bank dipping their toes into the metaverse waters. Deutsche Bank have made a similar effort with their space in Decentraland and at a recent event I heard from one of the team who highlighted the challenges it took to get the various approvals and ensure everyone in-house was comfortable with the steps pre-build (buy crypto, acquire land, safely store the related private keys, deploy the build, ensure sufficient disclaimers in the space etc etc).

🏫Education and training

Whilst not specific to TradFi, the opportunity for the metaverse to be used in education and training is becoming more of a hot topic. This is because the metaverse offers the opportunity for next level creativity, immersion far beyond that of a 2D website or zoom-call, and innovation in the way users experience it and what they experience in i

When we think about how financial education and training may look in the metaverse it could be using technologies such as virtual reality, augmented reality, mixed reality (often referred to under the umbrella of ‘Extended Reality’), it could be running the training within metaverse platforms like Decentraland, and it could be TradFis educating their customers on core metaverse and crypto topics to help them be web3 ready.

So what TradFis are using the metaverse for education and training?

• Bank of America launched virtual reality training to 50,000 of their employees which simulated client interactions and complex tasks. The aim was to ensure a unified training experience regardless of which of the 4,300 centres the training was run in and to provide a more immersive experience than classroom or online sessions.
• Fidelity also has a space in Decentraland but have designed it with education and engagement in mind. Users collect floating tokens as they go around and there’s information boards about metaverse concepts and investing.

We will definitely continue to see more TradFis taking their first steps into the metaverse, and who knows maybe in a few weeks/months/years doing our financial activity in the metaverse will seem as normal as using an app!

Originally published at https://www.linkedin.com.