Will the Future of Banking Services rely on Metaverse?

RAON
RAONSECURE
Published in
6 min readAug 11, 2021

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With the emergence of metaverse platforms and the high demand for non-face-to-face environments, Korean banks start to develop virtual environments enabling their customers to access banking services online like in the real world.

A metaverse refers to a three-dimensional virtual world that is more advanced than the existing virtual reality, and is a space where various companies and entities coexist and accumulate and utilize data. Metaverse allows people to communicate without spatial constraints, enabling them to explore new knowledges, and entertainments through experiences that would be impossible in the real world.

In this regard, a major Korean bank K. created a virtual ‘financial town’ that it is operating since July 1st on a metaverse platform. The virtual financial town consists of three spaces: (1) a Financial and Business Center, (2) a Telecommuting Center, (3) a Playground. (1) The financial and business center is composed of branches, public relation and recruitment booths, auditoriums, and social spaces. (2) The telecommuting center was designed to facilitate communication and collaboration between telecommuters and office workers, and (3) the playground consists of resting areas such as parks.

The bank has created such a test bed space environment within a metaverse platform with the aim of establishing a ‘Metaverse branch’. In this regard, the financial institution leverages a platform that implements virtual spaces so that only avatars that gathered in the same space can have video conversations.

As for the (1) financial and business centers, the bank has prepared a virtual branch where its customers can move with their avatars and talk to their banking advisers through video chat that will automatically start when standing in front of the latter. Through the video conference, the client can get advice on financial products and services and the program enables banking adviser to post links containing further information on the customer’s requests.

Source: donga.com/news

The first image shows a customer accessing the metaverse-based virtual branch (1), being tested by the bank K. If the customer moves his avatar into the bank window, he can have a video chat with a banking adviser and get counseling as if it were a real store. The screenshot at the bottom displays the telecommuting center (2) where employees working from home talk in real-time with employees working in the office through avatars.

The financial and business center (virtual branch) was still in the experimental stage, but the telecommuting center (virtual office) where the employees worked, has already been leveraged in a variety of ways. Since the beginning of July, the bank has been conducting meetings with employees working from home or enabling employees to work in a non-face-to-face environment through the metaverse platform.

For example, an employee working from home and using the platform can be seen through his avatar standing in a virtual office. When another employee’s avatar come to the office of the latter to discuss, both employees are immediately connected to the video so that they can talk almost seamlessly. When a team meeting is held, employee can move his/her avatar to the auditorium where the meeting will be held. On July 8th, the bank held a management meeting accordingly as well as technical meetings with external companies on the metaverse. The bank K. plans to keep actively using metaverse for management meetings and town hall meetings.

Another bank W. has recently held an in-house event on a Metaverse platform. Following the event, the bank announced on August 5th that it will actively promote a metaverse-based future financial business as soon as it will join the ‘Metaverse Alliance’.

The ‘Metaverse Alliance’ is a private “K-Metaverse coalition” with more than 200 member companies including Samsung Electronics, Hyundai Motor, SK Telecom, Naver Labs, and EBS, that is promoted by the Ministry of Science and ICT as part of the government’s digital new deal policy.

The bank has previously initiated its journey in the Metaverse industry by starting with a communication event called “Time for Bank President-MZ Generation Meeting” using the metaverse platform from a leading telecommunication company (cf. image below).

Source: https://www.asiae.co.kr

In the future, the financial institution is planning to develop a ‘Metaverse Future Finance Platform’ and an ‘Offline Metaverse Branch’ as joint projects in the ‘Metaverse Alliance’. The ‘Metaverse Future Finance Platform’ will use digital human-based AI banking advisers to develop services with industry experts from a user’s perspective so that the bank can understand how to evolve in the future Metaverse era. The ‘Offline Metaverse Branch’ aims to provide a new user experience by adding Augmented Reality (AR)-based financial information and services to real-world branches.

This trend is followed by another major Korean bank that has recently provided a ‘financial playground’ to its customers on its own metaverse platform (cf. image below).

Source: www.asiatime.co.kr/

In this regard, the financial institution enabled its customers to meet at the Stadium based in the Metaverse and support the 2020 Tokyo Olympics baseball team together. In order to do so, it created a Baseball Park on its platform and invited 20,000 baseball fans to join and cheer together on its metaverse platform as offline gathering are restricted.

Starting in the second half of this year, the bank plans to create various financial and non-financial contents such as financial branches, financial education, customer communication, and events and introduce them sequentially.

Among the major Korean bank that are adopting Metaverse, there is the bank H. that has previously conducted an event in the virtual world on July 12th. Leveraging a popular metaverse platform, the financial institution held an event for the “Grand Opening” of its Metaverse Training Center (cf. image below) and a completion ceremony of a mentoring program for new executives.

Source: www.asiatime.co.kr/

This metaverse-based training center is the first metaverse space unveiled by the bank H. that fully embodies the structure and appearance of physical training center. In the future, the bank H. plans to support employees to participate in the metaverse training center as a place for non-face-to-face communication and to use it as a space for voluntary learning.

In the future, Korean Banks plan to further enhance metaverse to a level where actual financial products and services such as subscription and remittance of products could be provided. While the banking industry is being very active in the metaverse space, other financial institutions are following the trend like the National Pension Service.

The latter has announced on July 21st that it has signed a ‘business agreement for the diffusion of blockchain technology’ with the Korea Internet & Security Agency in a metaverse platform. This is the first time that a public pension fund has signed a business agreement in a virtual space. Through this agreement, it plans to apply blockchain technology to pension services such as linking blockchain-based Verifiable Credentials with local governments and public institutions.

Source: https://www.donga.com/news/article/all/20210718/108023154/1

Source: https://www.asiae.co.kr/article/finance/2021080515404878359

Source: https://www.asiatime.co.kr/article/20210723500185

Source: https://www.yna.co.kr/view/AKR20210721139000530

Our View: with the new wave of coronavirus infection caused by delta mutation, social distancing has been extended in Korea, pushing Korean banks to jump into virtual space to narrow the distance. Most of the Korean banks are developing (or plan to) virtual branches and ‘financial towns’ on metaverse with the aim of providing their services and benefits to their customers in a risk-free environment that has already been adopted by the MZ generation. By facilitating communications while avoiding risks of infection, metaverse platforms also provide an optimal tool that can serve as a space for communication between employees. Eventually, with the growing use of digital assets and the potential release of Central Bank Digital Currency, metaverse is likely to be combined with digital assets in the future, contributing to the establishment of a new financial market.

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RAON
RAONSECURE

A leading IT integrated security and authentication group publicly traded in Korea, providing solutions and services to + 1,000 organizations.