Banking industry bets on the “metaverse” track: fleeting trend or breakthrough ahead?

Is the banking industry's interest in the "metaverse" a fleeting trend or a breakthrough ahead?

With the rise of the metaverse concept, banks have also taken notice and followed suit. Recently, Beijing Zhongke Jincai Technology Co., Ltd. (hereinafter referred to as “Zhongke Jincai”) announced that it had won the bid for the Shanghai Bank Metaverse Bank project. It is understood that Shanghai Bank will select application scenarios such as wealth management hall, metaverse business hall, and automobile finance services to create a metaverse bank.

Before this, many banks such as Agricultural Bank, Postal Savings Bank, Baixin Bank, and Nanjing Bank have also laid out metaverse applications, and the exploration paths mainly cover three categories: digital employees, digital collections, and virtual business halls.

01 Bank “Falling in Love” with Metaverse

Another local bank has made the latest progress in laying out metaverse businesses. Recently, Zhongke Jincai announced that it had won the bid for the Shanghai Bank Metaverse Bank project.

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It is understood that the Shanghai Bank Metaverse Bank project will use artificial intelligence, virtual reality and other technologies to create an online metaverse version of the mobile bank, and select application scenarios such as wealth management hall, metaverse business hall, and automobile finance services to create a metaverse bank that is highly immersive, has a good user and interaction experience, and has social attributes. The project aims to “match the emotional value and aesthetic experience of young people with the concept of metaverse” and build the Shanghai Bank Metaverse Bank application on the mobile bank.

Following technological innovation, banks have always been in the forefront. As an important direction of the future digital economy, metaverse has been laid out by many banks, among which “digital employees, digital collections, and metaverse business halls” are more typical. In December 2021, Baixin Bank officially launched the virtual digital employee AIYA Aya, which communicates and interacts with users in an immersive manner; Jiangnan Rural Commercial Bank launched the business processing digital person “Yan Xi VTM Digital Employee”, which can complete the whole process service such as business processing, active service, and risk control compliance.

Agricultural Bank, Postal Savings Bank, Everbright Bank, Huaxia Bank, Nanjing Bank, Qilu Bank, Xi’an Bank and other banks are exploring digital collections, introducing the concept of digital collections into marketing layout, and improving their brand image and customer acquisition and retention capabilities. Industrial and Commercial Bank of China has launched the “VR Metaverse Virtual Business Hall”, Nanjing Bank has launched the metaverse digital space “Hello World”, and has empowered product marketing services and customer services through metaverse.

In the increasingly homogenized financial services industry, the metaverse undoubtedly provides new avenues for banks to explore diversified financial services. Su Xiaorui, a senior consultant in the financial industry at Analysys, said that providing virtual financial services to users, expanding richer consumption and transaction scenarios, and creating interactive and immersive experiences for users are the main contents of financial metaverse in an economic system-based metaverse world. However, the metaverse is still in its infancy, and both the technical conditions, operating rules, and application scenarios are immature, so it is mainly strategic-level advance layout and planning.

02 Challenges and opportunities coexist

For bank retail, whoever gets the scenario will get the world. In January 2022, the People’s Bank of China issued the “Development Plan for Financial Technology 2022-2025”, which proposed to rely on visual technologies such as augmented reality (AR) and mixed reality (MR) with the characteristics of 5G high bandwidth and low latency based on offline to deeply integrate visual technologies into bank scenarios, and promote physical outlets to upgrade to multimodal, immersive, and interactive smart outlets, opening up policy space for banks to lay out the metaverse.

Currently, banks are carrying out technological exploration and innovative applications in the metaverse field one after another. However, from the actual effect, it is still in the aspect of providing immersive experience, virtual-real fusion interaction, and the idea of empowering comprehensive scenario finance in the metaverse has not yet been clarified.

Yu Baicheng, chief researcher of HouXue Research, analyzed that the virtual digital people, digital collections, and virtual business halls launched by banks are a component or primary form of the metaverse, but they are still far from mature. In addition, as a financial institution, banks have some space for integration with the metaverse, such as building a metaverse financial scene platform, becoming a service provider and payment institution for digital asset transactions in the metaverse, etc.

The metaverse is an important carrier for banks to explore business growth sources, but the core of future financial services still lies in user experience and customer needs. However, in the process of exploration, banks also need to anticipate related risks in advance. Su Xiaorui suggested that “the investment cost related to the metaverse issue is worth paying attention to. In addition, the metaverse uses a lot of new technologies as a new thing, and how to balance the efficiency and security of technology needs to be weighed. Banks should fully combine their own resource endowments and carry out differentiated exploration of the layout of the metaverse business. They also need to pay attention to relevant copyright, content compliance work, and carefully sort out the legal issues that may be involved to avoid disputes.”

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