The metaverse was supposed to be transformative. In March 2022, Meta CEO Mark Zuckerberg called it “the next chapter of the internet overall.” Three years ago, Satya Nadella, CEO at Microsoft, wrote on LinkedIn, “The metaverse is here, and it’s not only transforming how we see the world but how we participate in it — from the factory floor to the meeting room.” Back then, everyone was talking about it. And then, they stopped.
The banking industry embraced the metaverse at the height of its hype, with some institutions even launching their own initiatives. Coastal Community Bank developed Coastal World, for example, a digital banking 3D game and marketplace, while Quontic Bank created an outpost in Decentraland. But, as it did elsewhere, the metaverse eventually lost its luster in financial services. These ecosystems still exist; they haven’t been shuttered, but there haven’t been any obvious updates lately. And rarely does the metaverse come up in conversations among bank executives anymore.
So, what happened? Is the metaverse dead? Is there still any opportunity to be had?
Overall, the technology industry took a hit in the last few years as macroeconomic conditions deteriorated and private capital contracted. This is likely at least partly to blame. But beyond that, the metaverse ran into two distinct challenges: limited utility and a lack of societal readiness. In short, there weren’t any killer use cases (outside of gaming, which is quite niche) and people were not ready to, as Tesla and SpaceX CEO Elon Musk put it, strap “a frigging screen to their face all day.”
However, the metaverse opportunity may still exist — albeit in a less flashy, less monumental way. This is especially true in the context of two current “hot” trends: artificial intelligence, including the rise of AI agents, and stablecoins.
Here are a few ways that elements of the metaverse could play out as the banking industry grapples with the implications of these two technologies:
Virtual lobbies
Supercharged, generative AI-powered customer service is on the horizon. While the technology is not quite ready for primetime with bank customers, it’s getting there. The form factor for such interactions today is a chat interface, but that may not always be the case. As agents transform into avatars, a metaverse-like environment may make more sense, especially if it takes the form of a virtual lobby or bank branch.
Employee training
Generative AI is already getting incorporated into learning and development initiatives at community banks. LemonadeLXP, for instance, is a learning platform that uses generative AI to help bank employees create trainings and courses. Over time, such materials could evolve into a virtual setting. According to CEO John Findlay, “Historically, the issue with 3D experience training is cost. If AI makes 3D environments affordable, it could become an excellent tool for teaching soft skills and situation training such as customer service or sales, and leadership and conflict resolution.”
On and off ramps for digital assets
Stablecoins are demonstrating potential utility in areas like online gaming, e-commerce, and cross-border payments. However, users need to be able to convert these digital assets to fiat currency and back again. Banks are well positioned to provide the on and off ramps necessary to facilitate these transactions. And that includes in virtual environments. Banks can also offer secure custody services.
These are only a few examples — there are likely many more. Particularly when it comes to AI, any place where there is a chatbot today could benefit from an avatar in the future. And avatars need somewhere to live. As these virtual assistants grow more and more human-like, where they reside may grow more and more world-like.
It’s unlikely that the metaverse will regain its past momentum. Generally, once a buzzword dies, it stays dead. But that doesn’t mean the spirit of the metaverse doesn’t continue to present possibilities, for banks and for others. As society further experiments with advanced robots, digital currencies, and other new technologies, virtual ecosystems could emerge as an important mode for interaction.
Most likely, though, they’ll have a new name.
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