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State of Metaverse-based ecosystems in Fin-Techs
State of Metaverse-based ecosystems in Fin-Techs

July 11, 2022

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Paris Hilton has a Roblox virtual island where people can buy digital versions of her outfits. Accenture will onboard1,50,000 new hires using Metaverse. Metaverse has been the talk of the town since Facebook changed its name to Meta.
 

According to researchandmarkets, the global metaverse market size is predicted to attain USD 678.8 billion by 2030, witnessing a CAGR of 39.4%. Another report by CB Insights predicts metaverse could represent a $1T market by 2030. Every industry is working to create a reality in which the physical and digital worlds blend seamlessly. 

 

Where Fin-Techs are heading to in the Metaverse-based ecosystem?

 

European bank ABN Amro was the first to open a virtual branch in Second Life created in 2003. Financial services organizations' earliest ventures into the metaverse were primarily motivated by branding and visibility which is now shifting to the mainstream. Metaverse application has moved beyond gamification to virtual training and life-like experiences. We’re moving towards a future where digital lives are becoming more important with time, especially for the digital natives, whose life revolves around this immersive world. 


Razorfish and Vice Media Group's new study reveals that Gen Z not only spends more time in metaverse-adjacent spaces than older demographics but also is developing more meaningful connections to their online identities. Consumers want more realistic experiences in their virtual life. For organizations, it becomes highly imperative to understand how these customers connect, interact and interface in this virtual space.

 

According to JP Morgan’s research, the metaverse offers opportunities to:

  • Transact – every year, $54bn is spent on virtual goods, almost double the amount spent buying music. 
  • Socialize – approximately $60bn messages are sent daily on Roblox.
  • Create – GDP for Second Life was around $650m in 2021 with nearly $80m dollars paid to creators. 
  • Own – NFT currently has a market cap of $41bn.
  • Experience – 200 strategic partnerships till date with The Sandbox, including Warner Music Group to create a music-themed virtual world.

 

Metaverse has limitless opportunities to offer. Let’s look at some of the top use cases of metaverse in the financial industry.

 

  1. Recently Lynx announced two use cases: a cryptocurrency-based game that allows players to create and earn and sell digital items with financial value, and an "enhanced remittance experience", a digital meeting space that allows those sending money to loved ones to visit and communicate with them in a "streamlined, entertaining, economical, and secure" manner.

 

  1. Navi Technologies has unveiled a metaverse-based “Fund of Funds” scheme. The investors will be investing in Exchange-Traded Funds, also known as ETFs, that will be used to invest in metaverse-based companies. The fintech aims to invest $1 billion in total across multiple assets, with a maximum investment of $300 million in a single ETF. The company will issue a NAV unit at a face value of INR 10. For example, a customer investing INR 500 in the plan, will receive 50 units across the ETFs that Navi will be investing in.

  1. JP Morgan is the first bank to open a lounge-Oynx in Decentraland. In the Onyx Lounge, situated in Metaiuku–a virtual replica of Tokyo’s Harajuku shopping area, a tiger roams the first floor, overlooked by a portrait of the bank’s boss Jamie Dimon. While on the second floor a person’s avatar can watch experts talk about the crypto market.

 

 

  1. Korean Bank Kookmin introduced a ‘virtual financial town’ that includes three spaces: (1) The financial and business center consists of branches, public relations and recruitment booths, auditoriums, and social spaces. 

(2) The telecommuting center enhances communication and collaboration between telecommuters and office employees. 

(3) A playground for interacting.

Source: donga.com/news

  1. Bank of America is the first to launch VR training in over 4,300 financial centers where VR headsets are used to practice skills such as strengthening and deepening customer relationships, handling difficult conversations, and listening and responding with empathy. “Managers can also detect skill gaps and provide tailored follow-up training and customized counseling to colleagues to further boost performance using real-time statistics," the bank says.

 

The Road Ahead

 

Decentraland operates via its own cryptocurrency called MANA and Sandbox has Sand. Somnium Space has its own asset marketplace where users can choose to ‘live forever. 

The financial sector is becoming highly competitive in the virtual world, just as it is in the actual world. Digital assets and digital currency are becoming increasingly prevalent in the metaverse world. Leveraging the meta-world will help financial organizations create a continuum of experience for the users and provide more personalized and engaging interactions in the time ahead.

 


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Mantra Labs is a global experience engineering & consulting firm that builds intelligence-driven solutions and delivers digital-first customer experiences for global enterprises. With its 275+ skilled and passionate technologists, the company specializes in providing end-to-end solutions for its clients across eight key industries. Mantra solves the most pressing front & back- office challenges faced by BFSI, Healthcare and Consumer Internet enterprises. Having worked with some of the World’s leading Insurers like SBI General Insurance, Care Health Insurance, Pramerica, Aditya Birla Health and AIA Hong Kong along with unicorn consumer startups like Ola, Myntra, Yulu, BlueStone and Quikr - Mantra Labs has been deeply involved in developing AI-powered technology solutions for business-specific problems. The company also has strategic technology partnerships with MongoDB, IBM Watson, Microsoft Azure and Nvidia.

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