[The Editors' Verdict] The Financial Sector Also Swept by the Metaverse Craze

The existing financial sector is experiencing a heated craze for the metaverse (extended virtual world). Some banks have even held management meetings and established virtual branches within the metaverse space. Why is the traditionally conservative financial sector, known for its regulatory nature, so enthusiastic about the metaverse? It is because of the anticipation for new future financial models through the metaverse. The metaverse utilizes spatial technology and artificial intelligence to create a three-dimensional (3D) world where virtual and real coexist, marking the dawn of the 3D platform era. As the metaverse’s 3D platform space and audiovisual effects work together, it is reasonable to expect an expansion of new financial demand.

There is also a reflection on the “loss of leadership in the 2D financial platform to fintech.” While finance was rapidly undergoing digital transformation due to fintech innovation, the existing financial sector was passive, resulting in a loss of leadership. In the 3D financial platform era, there is a desire to secure the “first-move advantage.” Securing future customers is also an important factor. Many analyses cite the acquisition of the MZ generation, the future customer base, as one of the reasons why Kakao Bank’s stock price is significantly higher than that of traditional banks. From that perspective, the existing financial sector’s all-in approach to the metaverse, which the MZ generation is enthusiastic about, can be linked to strategic actions aimed at attracting future customers and increasing corporate value.

The current use of the metaverse in the financial sector is still in its early stages. It is limited to internal meetings, employee training, customer consultations, establishing virtual branches, and preparing to launch dedicated cards. Banks and others are competing to build metaverse platforms either independently or through partnerships with metaverse-specialized companies. Technologically, avatars rather than real people are used, and spatial technology is at the stage of utilizing virtual reality (VR) and augmented reality (AR), which precede XR (extended reality) technology. Even when virtual branches are established, concrete deposit, savings, and loan services are not yet offered, mainly due to legal and institutional factors rather than technological ones. A personal authentication system and financial communication network are required within the metaverse space, but external specialized companies with the necessary technology are not financial institutions, so using them could violate laws such as the Information and Communications Network Act.

The future outlook is bright. According to PricewaterhouseCoopers (PWC), the metaverse market is expected to grow rapidly from $95.7 billion last year to $476.4 billion in 2025, and $1.5 trillion by 2030 (1.8% of the global GDP). While gaming and healthcare will lead by sector, finance, as infrastructure connected to all industries, is expected to generate particularly strong convergence synergy effects. Experts predict that in 3 to 4 years, the current VR and AR stages will evolve into an open world XR stage where real people are projected into the virtual world. At that time, a metaverse financial value chain linked with various financial services will be created. For example, metaverse simple payments using virtual Hi-Pass devices, integrated authentication linked with metaverse platforms, and metaverse-type integrated asset management methods including virtual digital assets alongside existing financial assets are expected.

Since the metaverse is literally a virtual world, there are also expectations that using blockchain-based virtual currencies and virtual assets within the metaverse space will create synergy effects. In particular, movements to manage NFT (non-fungible token) assets, which have recently gained popularity among younger generations such as the MZ generation, within the metaverse space are also gaining momentum. In any case, with the advent of the metaverse, finance has entered the 3D financial platform era. We look forward to the creation of new revenue models and enhanced competitiveness in the financial sector under this new environment.

Jeong Yushin, Dean of the Graduate School of Technology Management, Sogang University

This content was produced with the assistance of AI translation services.