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Banks start setting out their Metaverse stalls

UK bank HSBC has become the first global financial services provider to enter virtual world The Sandbox. HSBC will buy a plot of land at The Sandbox, which will be developed to engage and connect with sports, esports, and gaming enthusiasts.

The Sandbox is a subsidiary of Animoca Brands, a Hong Kong gaming company. In November last year The Sandbox secured US$93M in its Series B fundraising round led by SoftBank Vision Fund 2, the world’s largest technology-focused investment fund. The investment is intended to scale the platform’s growth as a prime entertainment destination where brands and celebrities can engage with their fans through virtual experiences including games, live performances, and social experiences.

While details about HSBC’s investment were limited, this follows the US-based banking giant JPMorgan’s move in February to create a virtual lounge in popular blockchain-based 3D virtual world Decentraland. First opened to the public in 2020 Decentraland allows users to buy plots of land in the form of NFTs (non-fungible tokens) and interact and transact with other users through 3D avatars.

JPMorgan’s Onyx Lounge, which features a roaming tiger and a floating portrait of the company’s CEO Jamie Dimon, is located in the Metajuku mall, a 16,000 sq ft shopping district inspired by Harajuku, a district in Tokyo known as the center of Japanese street fashion. The Onyx Lounge will enable the JPMorgan to operate in the virtual world in the same way that it operates in the real world.

HSBC and JPMorgan are not the first banks to invest in the Metaverse. Back in 2006 Dutch banking group ABN Amro set up a virtual financial advice centre in Second Life. In 2021 the Industrial Bank of Korea (IBK) entered the social media platform Cyworld Z’s metaverse and NH Nonghyup Bank launched a virtual Dokdo branch, with plans for additional branches and a metaverse platform which incorporates the interests of millennials (those born between 1981 and 1996) and Generation Z (those born between 1997 and 2012), such as games, communities and finance. Other South Korean financial institutions, including KB Kookmin Bank and Hana Bank have all announced forays into the Metaverse.

By engaging customers in existing Metaverse platforms like The Sandbox and Decentraland Banks can identify potential customers, provide virtual banking services and create new banking experiences.In the medium to long-term these investments will help banks to consider developing their own virtual world platforms (a private metaverse), enabling new products and marketplaces and tying them back to traditional infrastructure.

Mikel Parera/unsplash

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