Banks beginning to engage with the Metaverse

For much of the past few years, if there was a focus on a Web 3.0 technology, it was probably blockchain, with cryptocurrency investments booming and technologies like NFTs promising to transform everything from real estate to art.

That changed in 2021 when Facebook rebranded as Meta and pivoted its focus towards the Metaverse.

There are various examples of banks and other financial service companies enthusiastically testing out metaverse to help flesh out some of its possibilities according to a Mobiquity Report.

For instance, JP Morgan proudly announced that they were the first bank to have a presence in metaverse.

The so-called Onyx lounge was unveiled alongside a report outlining how businesses can take advantage of what metaverse has to offer.

Given the early nature  of the technology, the initiative is designed as much to highlight where we currently are while also demonstrating what needs to come next, whether in terms of privacy, technology, or commercial infrastructure.

“We are not here to suggest the Metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike,” the company says in the accompanying paper.

Virtual Applications

Bank of America is taking a slightly more specific approach to its deployment metaverse technologies. The company announced at the back end of 2021 that it will be rolling out a virtual reality platform to help train staff.

The VR-based training has been rolled out in around 4,300 financial centres across the United States with the aim of providing over 50,000 employees with a platform to practice a wide range of simulated client interactions.

“VR is highly effective at helping teammates build and retain new skills and it is one of many ways we are using technology to support internal mobility and provide best-in-class learning opportunities,” the company explains.

Meanwhile, BNP Paribas has taken a different approach. The company has long been dabbling in VR-based services, but their first real foray into Web 3.0 and metaverse has come via what they refer to as W.I.R.E.D. (Wearable Immersive Real Estate Dataroom).

This is a digital twin project that aims to provide a realistic simulation of a city, with this allowing the company to then look at the past, the present, and the future of the city and provide a truly virtual immersion into the way the city evolves.

For instance, W.I.R.E.D. will allow users to explore various European neighbourhoods complete with qualified data for each property.

“The transaction business is changing; technology is supporting the transformation and W.I.R.E.D. is a perfect example. This immersive tool will allow us to better respond to our clients’ questions and needs,” explains Eric Siesse, Deputy General Manager of BNP Paribas Real Estate Transaction.

HSBC has made an initial foray into metaverse via The Sandbox virtual community.

The financial services firm has bought a plot of virtual real estate in The Sandbox that the company will use to engage with users on the platform.

The company believes that the Metaverse will be the primary way by which users will experience Web 3.0, and this, therefore, opens up a wide range of opportunities to create new experiences with customers.

HSBC is joining over 200 other companies across various other industries that have already launched on the platform.

Of course, it’s not just the big names that are dabbling in metaverse.

For instance, Zelf is developing a banking system to facilitate the exchange of goods and services from virtual worlds into the real world.

The service builds on existing offerings of embedded banking within various messenger apps. Or you have Tintra, which is developing the first bank specifically designed for metaverse.

These are just a few examples of what Goldman Sachs argue is an $8 trillion opportunity as the digital economy grows from 20-25% of the global economy today to even greater proportions in the years ahead.

Challenges ahead

This level of optimism should not cloud us to the very real challenges ahead, however, not least of which revolve around the energy footprint of metaverse.

For instance, research from Carnegie Mellon University shows that training a standard natural language processing (NLP) model produces an estimated 626,155 lbs of carbon dioxide emissions, which is roughly  5 times that produced by a car over its lifetime.

Metaverse is likely to have a similar impact on energy consumption.

For instance, computing giant Intel recently argued  that the technology will require around 1,000 times more computing power to function effectively.

There are clear plans afoot to try and make this footprint as small as possible, however.

For instance, Meta recently secured 100% renewable energy status, while Microsoft has pledged to ensure Azure is likewise by 2025.

The technology will also shift activities out of the real world, which might also reduce our carbon footprint.

For instance, research from the University of Texas finds that virtual conferences are generally more environmentally friendly than physical conferences, with the researchers calculating that a single in-person event generates about as many emissions as 7,000 virtual events.

Most of the early investments in metaverse are still at an experimental stage, but what does appear clear is that if they are to take off then they will need to show to consumers that they are sustainable as well as user-friendly.

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