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Banking On Success: Big Banks Are Entering the Metaverse

Photo by Paul Fiedler / Unsplash

Traditional financial firms are following big brands into the metaverse, launching branches and consultancies to position themselves for the future.

Banking giant JP Morgan gained first-mover advantage back in February, opening a virtual lounge on the Ethereum-based Decentraland platform. The Onyx lounge, which is located in the digital equivalent of Tokyo’s Harajuku shopping district, Metaiuku, doesn’t actually allow the user to do any banking – at least not yet. At present, all you can do is walk around the lounge, behold the looming portrait of CEO Jamie Dimon, and watch videos about blockchain from plasma screens on the walls.

Importantly, though, the lounge’s arrival coincided with the publication of an official JP Morgan report which suggests the metaverse poses a market opportunity of $1 trillion in annual revenue.

Banking On the Blockchain

Other financial entities have followed suit. Big Four consultancy firm PwC Hong Kong, for example, acquired land in The Sandbox and intends to “leverage our expertise to advise clients who wish to embrace the metaverse on the full range of challenges presented by this emerging global digital phenomenon.” The parcel of digital land was purchased for around $10,000.

Not to be outdone, HSBC snapped up its very own Sandbox land plot for an undisclosed sum in March. Like HSBC, it intends to put the land to tangible use, with a focus on engaging and connecting with sports, esports and gaming enthusiasts – which currently make up the bulk of metaverse residents.

How exactly this connects to HSBC’s core business is anyone’s guess but according to the bank’s Chief Marketing Officer Suresh Balaji, the move will allow HSBC to create “innovative brand experiences” for both new and existing clients.

Elsewhere, American Express has filed a slew of metaverse-related trademark applications, including those related to “electronic transfers of money in the metaverse and other virtual worlds” and “banking services in the metaverse and other virtual worlds.” Now you’re talking: a company that wants to basically wants to do what it already does IRL, in virtual reality.

In terms of banks setting up virtual branches, there has been just one example so far: PKO Bank Polksi, which serves Central and Eastern Europe. Instead of launching a mere lounge, PKO has unveiled a digital twin in Decentraland with a view to initially onboarding and training new employees. The bank will also assess the feasibility of offering banking products further down the line.

Such plans don’t seem overly ambitious, although it’s fair to say crypto-assets are better suited to the metaverse than fiat currency. To this end, Decentraland recently announced the world’s first metaverse ATM in partnership with Transak. The ATM can be used to exchange fiat for crypto including Decentraland’s native currency $MANA. Land owners in Decentraland are also able to add ATMs to their properties for easy access to their NFT/crypto portfolios.

It’s clear from these developments that banks view the metaverse as yet another opportunity to reach customers, sell products, and promote a fresh and forward-looking image.