Today during a panel at theĀ SIBOSĀ banking event, the range of metaverse definitions became apparent. Some think of theĀ metaverseĀ as gaming, while others consider it a more diverse 3D experience. HSBC sees it as the convergence of the digital and the physical world, including the time weāve spent online during the pandemic.
Mike Abbott from Accenture explored some of how banks are using the metaverse. In Korea,Ā Kookmin Bank (KB)Ā is launching virtual branches where customers can talk to financial advisers. Accenture recently conducted a survey with tens of thousands of banking customers worldwide about whether theyād want to speak to their bank in a virtual world. More than half said yes. So interfacing with clients is one potential application for banks.
He acknowledged that whileĀ JP MorganĀ and others have started their metaverse presence, āwithout people, a branch is an empty location. Itās absolutely nothing. So the metaverse needs a population,ā said Abbott.
Accenture has set an example of how to populate virtual worlds. Since the start of the pandemic it hasĀ onboarded 150,000 employeesĀ using its metaverse experience.Ā
Bank of AmericaĀ is using virtual reality to train 50,000 employees. Apparently, that even includes preparing for a bank robbery, which is more useful in an āimmersiveā environment. So employees using the metaverse for collaboration is a second application.
Interfacing with clients and employees is really using it as a communication channel. Whereās the money?Ā
The market capitalization of virtual land in web3 metaverses amounts to billions of dollars. So real estate finance is one potential business model. However, weād observe sales are already being re-financed, which is happening in DeFi, not via banks.
Another application is payments.
Abbott said that every bank asks how they can dominate payments in the metaverse. āItās the absolute wrong question to ask,ā said Abbott. āPayments in the metaverse, or payments for that matter, anywhere is not about paying, itās about being paid. Itās how do you accept payments on the other side?ā
He continued, āyouāre not gonna scale this industry by thinking any individual bank is going to dominate.ā Instead, it needs collaboration on standards.Ā
HSBCās metaverse, web3 learning
HSBCās Catherine Zhou spoke about web3 in a similar vein. She distinguished between the Web3 economy and service providers. HSBC wants to be an āecosystem platform provider to power up the Web3 economy rather than compete with the economy,ā said Zhou.
The key distinguishing feature of web3 is users control their own identity and data, and the ability for users to create value.
She made some recommendations about what not to do in web3, which is to avoid porting web2 experiences. For example, she considers a digital wallet a web2 phenomenon. In web3, she expects payments to happen on a (virtual) handshake or in the blink of an eye.
HSBC bought land in The SandboxĀ metaverse and has learned to pay gas fees. And now that Ethereum has moved to proof of stake with validators rather than miners, Zhou asked a very banker-like question: āHow do we actually validate the validators? What if theyāre in North Korea?ā
And learning by doing is priceless.
āIf thereās one thing to take away from this, it is to really play the game fast and learn and fail fast. And keep pivoting,ā said Zhou. āAnd donāt sit there and watch the game. Play the game.ā
