Sibos 2022: Breaking New Grounds - Banking in the metaverse

Sibos 2022: Breaking New Grounds – Banking in the metaverse

At Sibos 2022, Swift’s “Highlighting Digital Value: Conquering the metaverse” revealed the arguments for banks to carve out space in emerging virtual worlds.

The metaverse begins with purpose, place, population, property, and portability

Michael Abbott, the global leader of Accenture Banking and responsible for its vision and strategy, has changed the hearts and minds of the skeptical public, making the case for creating a store in cyberspace with a five-point smoothing argument.

has five Ps; purpose, place, population, property, And the MobilityIn this article, he gave an insight into Accenture’s motivations for encouraging banks to plunge into these unfolding virtual worlds.

“If you’re going to be in a metaverse, that starts with a goal. You have to have a reason for being in a metaverse, and the banks are really starting to find a goal,” Abbott explains.

For example, some banks allow people to have conversations with their financial advisors in the metaverse. “In today’s digital age where we’ve been apart for two years, that’s a unique concept, having a conversation again, perhaps like we used to in branches 50 years ago,” Abbott reflects.

At the same time, the metaverse is a place that has its spatial logic and consistency. Banks are already studying this, too. Many have joined J.P. Morgan and others around the world in creating their own subsidiaries in the metaverse.”

The problem, though, is that you can create a branch, but without people you won’t have “anything at all,” Abbott says. So, the metaverse needs a population. Abbott says the best place to start in terms of populating the metaverse is internally. Bank of America is already using the metaverse, to train employees on the entrances and pans of virtual reality (VR).

raise your hand

“Training for a bank robbery in the metaverse is very different from training on a flat screen. It’s a whole new level of immersion.”

Metaverse is also about owning property. “If you think about Facebook today, do you own your Facebook data? Mark Zuckerberg is your owner, you don’t own your Facebook data,” Abbott says.

This is the basic difference between the metaverse and the web. In the metaverse, you own you and your own property. Abbott takes a moment to ask the audience if they know the identity of the individual on display, a photo of a man reclining in a large, stately virtual property.

Only one person, your reporter, knows the answer: hip-hop entrepreneur Snoop Dogg. The musician bought real estate in Sandbox, one of the major scales, for about $3 million last year.

Interestingly, someone paid 450 thousand dollars for the house next door to Snoop Dogg. Then Abbott asked the bankers in the room, “How many of you are willing to lend $450,000 to someone to buy a house next to Snoop Dogg? I see a lot of ‘No’ there. By the end of this presentation, you’d be willing to give them that money.”

Which is easily divided into portability. Buying and owning something is just one side of the (crypto) coin. Why own something in the metaverse if you can’t sell it somewhere down the line? “You have to be able to take that property with you and that’s where it becomes critical to the banking industry,” Abbott says.

Abbott believes that banks are in the best position to be custodians. “We’ve all seen cryptocurrency news about how millions and billions of dollars are stolen. It doesn’t happen in the banking system because we figured out how to do the saving process. So, this is a huge opportunity for banks around the world.”

Apple and blackberry

“The main idea is that the metaverse is really a projection of our reality, what we do today but put it in a virtual world,” Abbott explains, talking about the PS Five. “But there is still a reality check.”

Metaverse is still in its infancy. To demonstrate the evolution of technology, especially technology that has become so ubiquitous that we take it for granted, Abbott pulled the Apple Newton, an initial smartphone and personal organizer that the tech giant launched in 1993. Needless to say, it was before the curve that it flopped.

“If you were attentive in 1993, you could have envisioned the future.” Virtual reality goggles and handheld controls currently needed to access virtual worlds will give way to harmless specs and a hands-free experience. “We’re in the Apple Newton phase of the metaverse,” Abbott says.

Banks will take advantage of the opportunities, as they have done in the past. In 1997, Royal Bank of Scotland (RBS) was the first to launch a mobile banking app on a Blackberry phone, resulting in mobile banking apps used by 90% of people today. “The same thing will happen,” warns Abbott.

The big question is how do you make money. “Banks, in my opinion, are driven by two things, fear and greed, and the fear of missing out has never been higher. But before we talk about how to make money, let’s step back a bit and remind ourselves that you need a purpose.”

The purpose that will confirm the presence of banks and financial institutions in the metaverse is to make financial services more humane. Accenture conducted a survey, asking tens of thousands of customers around the world if they would be interested in speaking to their bank in virtual reality. 56% said they would, “even though it doesn’t exist today.”

Abbott says that’s about as good a request as you’ll get. With purpose in mind, the next concern is payments. Every bank wants to know how it will dominate, Abbott says, but “that’s the wrong question.”

Paraphrasing the question, it’s not about making payments but being able to accept payments. Once again, history teaches us a lesson, this time about cooperation and collaboration.

hands around the world

In the 1930s, store cards were introduced. Naturally, they worked in only one store, such as the Sears store. The equivalent today is Roblox cash, Abbott says, which is essentially brand-specific cash that you can only use within that specific metaverse. But what happened to the cards? Tired of carrying dozens of store cards, there was pressure from the consumer to combine different outlets into one card.

Payments in the metaverse could take credit card lessons 100 years ago

“These closed networks began to develop, like American Express, which allowed you to use one card in many locations.” Abbott believes that today’s equivalent is bitcoin. “But eventually the banks got smart and realized that if they didn’t do something together, they were going to lose that space.”

They came together in the 1960s, eventually forming the Visa and Mastercard networks. Today, Visa and Mastercard handle ten times the volume of any nearby payment network. “The question is, how do you go from that second stage of closed networks to the third stage?”

It will take collaboration, Abbott says, working together to set standards. “It’s not going to be a winner-takes-all game,” Abbott says. In order to dismiss any naive optimism on his part, Abbott reminds the audience that in 1973, 239 banks around the world in 15 different countries decided to come together and create the interbank cooperative Swift, which revolutionized global payments.

“They recognized that there is power in collaborating and building those standards. And if we build those standards together, we’ll start a whole new level. It’ll allow us to put humanity back in the bank. It’ll allow you to create mobile loyalty programs. Moreover, it probably represents one of the biggest marketing opportunities. available,” says Abbott.

Concluding his presentation, Abbott signs: “The metaverse is coming. Don’t be afraid to get lost, build strategy, start thinking and stay curious.”


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