Since the onset of the metaverse, the space has witnessed an influx of various sectors including, sports, music, agric, health, and even Fintech. The article discusses fintech and meterverse, fintech companies in the metaverse, and the future of fintech in the metaverse.
Metaverse promises a universe beyond our real world. It’s a location where social media technology, augmented reality, and virtual reality collide to create a simulated digital environment.
A shared virtual 3D world that is interactive, immersive, and collaborative is born at the intersection. The metaverse will alter how people interact, how businesses develop, and how creators are paid.
With it will come, stronger social interactions than anything that is possible today, as well as a digital economy that helps millions of entrepreneurs and innovators.
The amount and types of technology used in the metaverse, which provide a higher sense of engagement, autonomy, and boundlessness, are what set it apart from other virtual worlds.
Fintech, as it is more often known, is a term used to describe emerging technology that aims to enhance and automate the provision of financial services.
Software, mobile apps, and other technologies that have been developed to enhance and automate conventional forms of finance for both corporations and consumers are also included in this category.
At its foundation, fintech uses specialized software and algorithms that are employed on computers and, increasingly, smartphones to assist businesses, business owners, and individuals in better managing their financial operations, processes, and lives.
The creation and application of cryptocurrencies like Bitcoin are also a part of fintech. Fintech today refers to a number of financial activities that can be done without a person’s help, such as money transfers, check deposits using smartphones, credit applications outside of bank branches, raising money for business startups, and investment management.
Fintech and the Metaverse
As a digital platform for interpersonal and professional interactions, including financial transactions, the metaverse is expected to gain significance.
It will be essential to be able to manage finances and transactions in order to make this new environment as immersive and realistic as possible. Financial services firms and fintech are becoming more aware of the prospects presented by the metaverse.
Fintechs are concentrating on two areas in the metaverse: first, enabling banking consumers to digitally interact with bank employees and conduct transactions, investments, and purchases of banking products. To increase client involvement, the second strategy is gamifying financial services.
The metaverse presents a chance for fintech and neobanks to increase the number of existing clients (who tend to be more tech-savvy Gen Z or Millennials) for their goods.
Examples include financing digital storefronts, digital financial advice, loyalty programs in partnership with metaverse shops, and crypto services.
Without a question, financial services companies and fintech are becoming more aware of the potential of the metaverse. For example, eToro, a brokerage company, presented its MetaverseLife (which includes cryptocurrency and blockchain-based platforms like Decentraland and Enjin).
Fintech companies in the Metaverse
Some companies have decided to take fintech beyond the traditional level of which it is known to a more distinct location which is the metaverse. some fintech companies in the metaverse include
- JP Morgan
- South Korea’s Kookmin Bank
Through imaginLAND, CaixaBank’s digital services and lifestyle platform Imagin will join the metaverse. The project will make it possible for the platform to start and manage activities in the world of virtual reality, and it will be accessible to all of its users.
Through imaginLAND, the effort will provide immersive experiences to more than 3.7 million Imagin users. Imagin becomes the first European fintech company with a significant online presence by founding imaginLAND.
“What is evident is that the metaverse is here to stay, and it will continue to swiftly add more activity and people,” says David Urbano, Chief Marketing Officer at Imagin. We have chosen to invade the major metaverses because of this.
JP Morgan opened a lounge in the well-known blockchain-based world of Decentraland in February 2022, becoming the first bank to establish a presence in the metaverse.
Decentraland is one of the most well-liked metaverses, with predictions of a market opportunity of US$1trn and an eye toward virtual real estate.
The US financial behemoth purchased a sizable portion of Decentraland and built its Onyx Lounge In Metaiuku, a digital recreation of Tokyo’s Harajuku shopping district.
In March 2022, The Sandbox, a leading decentralized gaming virtual world, and HSBC, one of the largest international banking and financial services providers in the world, recently announced a new partnership that will provide a variety of opportunities for virtual communities around the world to interact with international financial services providers.
In a ground-breaking collaboration, The Sandbox and HSBCwill see the global financial services provider acquire a plot of LAND that will be used to interact and connect with fans of sports, esports, and gaming.
South Korea’s Kookmin Bank (KB)
With the creation of the KB Metaverse VR Branch Testbed, one of South Korea’s largest financial institutions, Kookmin Bank, has entered the virtual world.
By donning a head-mounted VR device, consumers will be able to access banking services in the metaverse. Additionally, it has begun offering customer support alternatives that include one-on-one metaverse consultations between a customer and an employee.
KB intends to use the virtual branch to train staff members and teach young people about finance.
Leading financial service provider Sokin helps both businesses and consumers to make international payments. Sokin, a fintech company founded in 2021, is positioned to enable full e-commerce payments for the first time in the metaverse even if it doesn’t function as a bank.
Customers will be able to interact, talk, transact, invest, and make purchases in one comprehensive ecosystem and virtual economy in Sokin’s metaverse environment, which will include a 3D community of brands and stores ranging from sporting to fashion and beyond.
Sokin will introduce a metaverse community built to handle complete e-commerce transactions. Through Sokin’s readily available peer-to-peer mobile app within the metaverse, customers will make purchases.
Vroon Modgill, founder and CEO of Sokin, who has already partnered with a number of international football clubs, notes that “Sokin’s metaverse universe will contain multiple brands and businesses for visitors to access, for example, a football club, entertainment or fashion company.”
“We are spearheading this never-before-seen innovation as we further bridge the gap between the metaverse and the physical world,” he claims.
Future of fintech in the Metaverse
The metaverse promises some development in fintech which would involve:
- Virtual Business
- Virtual customer interactions
- Virtual Staff Training
Virtual Business: We can anticipate a boom in companies serving the financial demands of metaverse residents. In such a future, companies that manage financial data and supply financial infrastructure, as well as those whose duty it is to assist in facilitating value exchange in the virtual environment, will play a crucial role.
Companies that develop virtual assistants and other AI-powered agents for financial services should also most likely have a lot of work to do in building up the metaverse. Blockchain and digital asset companies will undoubtedly be crucial in the metaverse.
Virtual customer interactions: The most likely way that fintech companies will initially interface with the metaverse is through virtual consumer interactions.
Numerous fintechs and financial services firms have already taken cautious moves in this direction, as was previously mentioned, by deploying AR/VR technologies.
Virtual Staff Training: In addition to providing customer-facing features, this type of metaverse deployment can serve as a training ground for individuals working in the financial services industry.
It is simple to envision financial institutions creating and providing virtual environments so that they and their clients might improve the knowledge of their wealth management teams, financial crime and regulatory staff, and other groups.