Banks were among the first to discover and harness the power of data through big data and analytics solutions, they are among the most advanced in terms of digitizing their operations over the years, they are among the most advanced in the use of exponential technologies such as artificial intelligence and machine learning and now they face the challenge of setting the standard and showing the way to many other sectors on how and why to land correctly in the metaverse.
Although for many, the metaverse is a subject that has yet to be developed and is experiencing its “early adoption” phase, in the short time it has been going on it already has important figures to show. According to a report by Bloomberg Intelligence, in 2021 the value of the metaverse was already estimated at 500,000 million dollars and the projection is that it could increase fivefold by 2030.
There are other related indicators that give the dimension that this new digital universe is beginning to have. The extended reality (ER) market, for example, which encompasses metaverse technologies such as augmented reality (AR), virtual reality (VR) and mixed reality (MR), is estimated to grow from $59 billion recorded in 2021 to 300 billion in 2024. And the valuation of virtual currencies (key in this new scenario) such as Bitcoin have reached historical highs above 60 thousand dollars.
Gucci Garden, Nikeland, Hyundai Mobility Adventure or Louis The Game, from the Louis Vuitton brand, are some examples of real and current brand presences that are already generating revenue in the metaverse. And examples such as the virtual reality platform Decentraland, created in Argentina and based on the blockchain chain to generate operations with the virtual currency Ethereum, already has a market valuation of 4.2 billion dollars. Valuation that is part of the new categories of tradable goods such as “NFT” or “Non-Fungible Tokens” that currently have a global market value of at least 25 billion dollars.
With this money circulating as a result of all these new digital opportunities and with the conviction that people will be there in the future interacting in an important way (Gartner estimates that in 2026, 25% of the population will spend at least one hour a day on the metaverse working, training, interacting or entertaining), the metaverse is not alien to the interest of the financial systems and banking, specifically, it begins to see it as an important part of its future.
Today, renowned banks such as Standard Chartered and JP Morgan Chase have announced their presence in this new digital universe. Standard Chartered is the first bank to acquire “virtual land in the Mega City district of The Sandbox metaverse, a cultural hub based on or inspired by Hong Kong talent.” The initiative is led by SC Ventures, the innovation, fintech investment and venture arm of the Standard Chartered Group and aims to actively engage its clients, partners, staff and technology community to explore co-creation opportunities in this new space.
JP Morgan Chase, considered the largest bank in the United States, was one of the first financial institutions to jump on the metaverse through an investment in Decentraland. According to the bank, the metaverse has a $1 trillion annual revenue market opportunity as creators take advantage of Web3 to monetize their work in new ways.
The example has been followed by banks such as HSBC, Santander and Caixa and more and more institutions are landing or beginning to plan their presence in the metaverse.
Some institutions do so attracted by the business opportunities that are beginning to arise there, but in reality it is a new step in the digital transformation of banking due to the new promise in the market of “following consumers wherever they go.” ”.
The presence of traditional banks in the metaverse is also beginning to be seen as an opportunity for these traditional entities to compete with digital banks, the so-called neobanks or the so-called Fintech. All of these are examples of new institutions that have been revolutionizing and providing much of the innovation in banking services in recent years.
And a third and very important component of why banks are attracted and will be even more seduced in the future by the metaverse, is in the data and business intelligence that this new scenario will offer banks.
The data, and more precisely the use of it, through solutions such as analytics (which transforms it into intelligence to make better decisions), big data, artificial intelligence, machine learning and other areas that make up data sciences have been increasing the knowledge that brands have of consumers or clients, allowing them to optimize marketing campaigns, create better commercial offers and optimize a large part of the budgets, achieving better results. Those are opportunities that banks do not want to miss in the future.
The power of data is already being harnessed in brand strategies around the world and with the metaverse new levels of knowledge, interaction and intelligence will be reached. New levels that will lead to the creation of a new bank. A bank that has already been transformed with the accelerated digitization that has occurred in recent years and that now awaits further evolution in the metaverse.