The latest report revealed that several giant financial institutions are flooding virtual space. Many are already setting up their presence in the space, creating a new wave of digital world clients.
Although the tech sector might have gotten used to the Metaverse over the years, it is an entirely different scenario to see financial institutes take a tremendous interest in the Web3 space. The best opportunities the virtual offers are the primary catalyst behind the wide adoption.
According to the report, the Metaverse has a massive user base that is primarily young and tech-savvy and in the early phases of building their finances. With their venture in the space, Banking firms would have unique opportunities to connect and build a relationship with the vast number of fintech consumers.
For context, the metaverse is a blockchain-based virtual space that provides dynamic real-time and socio-cultural experiences to users. It embodies decentralization and sets up deep social interaction and experiences using augmented reality AR and virtual reality VR.
In simple terms, the Metaverse is not controlled by any single entity or application. Hence, users can surf Web3 on different metaverse apps using a single identity.
Giants Banks Ventures Into The Web3
As per reports, many giant Traditional financial institutions have been venturing and setting up their businesses in the virtual space. For instance, JP Morgan recently opened a wholesale payment platform, Onyx, in the Decentraland Metaverse platform.
Furthermore, HSBC announced in March 2022 that it would buy land on the Sandbox, where it would engage with its virtual clients, offering them unique Web3 products and experiences. Additionally, DBS and Kookin, two giant financial firms from Asia, announced their entry into the virtual space recently.
Kookmin, a South Korea-based bank, offers financial and one-on-one customer care services to its users on the metaverse. In addition, it plans to train its staff on the risks and advantages of the metaverse and educate young customers on financial management.
On the other hand, DBS, which is the biggest bank in Singapore, reportedly bought a plot of virtual land on The Sandbox. It plans to promote a more sustainable world by creating interactive customer experiences.
Banks Prepare Their Financial Managers For Web3
Currently, two Canadian banks, TD and RBC, are operating metaverse test pilot projects. They aim to understand the mechanism of the metaverse system so as to stay ahead of others in innovation and also offer deep-quality services to their clients.
TD Bank ran several pilot tests between January and April, including a test on user experience. Experts revealed that the dynamics banks employ in the metaverse go beyond virtual ceilings and purchasing virtual lands.
In addition, they suggested that the banks are preparing their financial advisors and account managers on how to manage financial products on the metaverse—products like metaverse index derivatives and ETFs.
These products are reportedly based on the rapidly increasing market caps of metaverse-based digital assets. It is also moved by a shift in investment targets by Gen Z, Gen X, and millennial investors.
In addition, a recent report by Capgemini buttressed the bank sector dynamics. It revealed that about 70% of individuals with high net worth have investments in digital assets, with the majority choosing crypto as their favorite digital asset they invest in.
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