The metaverse is not new, but it is still obscure and difficult for many to get their heads around. While it is one of the five key forces driving change across all industries, banks have yet to come up with a definitive answer to the obvious question: how can we make money from it? Yet if the estimates are to be believed — some analysts have projected that the total addressable market will grow to $8 trillion in as little as the next eight years—then the opportunity is simply too big to ignore. It’s significant that the natural evolution ofthe metaverse as a banking channel is following a similar playbook to banks’ move online and their adoption of mobile. However, it’s happening much faster. Many are still skeptical, but when mobile burst onto the scene, few thought it would be feasible to shrink banks’ online experiences into a space little bigger than the palm of their hand. Just as mobile did, so the metaverse is opening a new world of possibilities. We believe most banks will approach the opportunity with a four-step strategy: enable, engage, invent and imagine.
At its most basic level, the metaverse enables banks to interact with their employees and customers in an infinitely richer environment. Just imagine a simulation where a branch team is totally immersed in responding to a bank robbery as it happens—there is no comparison between that and using conventional training media.
The metaverse may be our best opportunity to put humanity back into banking. What if you could engage in a VR conversation with a customer in their living room, as Kookmin Bank does? Or show customers how they can adopt sustainability in all aspects of their lives, including their finances, as DBS’s LiveBetter does? Or use gamified experiences to help young customers improve their financial literacy, as Ally Bank does with its Fintropolis? The potential is limitless.
We cannot be certain how this new channel will evolve in the years to come or how it will reinvent banking, but few are disputing that the change will be rapid and far-reaching. This will be especially true for payments— not how we pay, but rather how we get paid. Trusted standards for acceptance will need to emerge and the form and method of payments will change: will we use a card to pay in the metaverse or will we AirDrop money to each other? These questions will receive a lot of attention from bankers in the next 12 months—47% of them believe customers will use AR/VR as an alternative payments channel by 2030.8
Banking in the metaverse will deliver value. It’s hard to imagine everything it will encompass and it’s still a way off, but the trajectory is emerging. The rapper Snoop Dogg bought land and built a virtual mansion on the Sandbox platform, after which a fan bought a neighboring plot for around $450,000.9 The question for bankers is: would you lend that $450,000? Would you insure the property? The revenue streams could be substantial, and with 400 million active monthly users over 20 banks having already set up on the metaverse, someone is sure to grab the opportunity.
Vertiass has worked with a number of industry experts on devising rightsized uses and provisional approaches towards leveraging the opportunities of the Metaverse. Let’s help you on your journey. Contact us.