Following the money takes finance to the metaverse

Finance

Published: 21 Jul. 2021, 18:52 Updated: 21 Jul. 2021, 19:09

Following the money takes finance to the metaverse

Avatars representing Shinhan Card CEO Lim Young-jin, left, and Naver Z CEO Kim Dae-wook pose for a photo on Wednesday after inking a partnership to create metaverse-related content and financial products targeting young customers. [SHINHAN CARD]

Credit card companies are finding ways to get virtual people to spend real money in the metaverse, while banks are doing their best to get in on the action.

Shinhan Card said Wednesday that it will release a pre-paid card that can be used in both the virtual and real worlds. The product is being rolled out in cooperation with Naver Z, the operator of the Zepeto metaverse app.

The card company will also build a dedicated virtual space within the Zepeto metaverse to run various promotional events for its card users.

The metaverse is a virtual space where people can guide avatars and interact with other avatars and with the computer-generated environments.

The virtual reality technology has been gaining a lot of attention from financial institutions as they see it as a way to access younger clients. Among the 200 million users of the Zepeto app, 80 percent are aged 10 to 20, according to the card company.

The technology has the potential to completely reshape the landscape of digital finance, the companies argue. Social distancing measures during the pandemic have only accelerated the trend of companies moving to the metaverse for marketing events.

Shinhan Card said its to-be-released pre-paid card will come in customized designs reflecting each customer's avatar in the Zepeto metaverse. As teenagers mostly use cash, the pre-paid card will be able to be charged with cash and via bank accounts.

"This project is an attempt for us to set foot in the metaverse platform," said Ryoo Tae-hyun, director of the digital first division at Shinhan Card. "We are the first among financial institutions to run a project in partnership with Zepeto."

Hana Card has been building Hana Card World within the Zepeto metaverse.

Hana Card's virtual venue built on Zepeto metaverse [HANA CARD]

The card company announced last week it built a virtual venue with six spaces, including a concert hall and a camping site, where avatars can visit and enjoy cultural experiences.

The company is planning to hold virtual fan meetings with musical artists at its venue and run marketing events in collaboration with brands.

"In the longer run, we are expecting to use the metaverse platform as a communication channel between the company and our customers," a spokesperson for Hana Card said. "We could introduce new cards or offer customer consulting in the metaverse."

"Hana Card employees are preparing for the future by creating their own avatars in the virtual space and holding business meetings there," said Chris Im, director of the marketing division at Hana Card.

Virtual customer consulting may not be a so far-off future as banks are already experimenting with the platform to bring their counters to the virtual space.

KB Kookmin Bank announced last week that it has created KB Financial Town on metaverse platform Gather. While the pilot virtual space by the bank currently supports meetings between bank managers and communication between employees working at home and employees working at the office, KB Kookmin is planning to open a virtual bank branch in the near future.

"We don't have a specific timeline yet, but building a virtual bank branch on our own metaverse platform is one of the options that we are reviewing," a spokesman for KB Kookmin Bank said.

If a virtual bank branch is built, the marketing of products can be done without the customers going to branches. This may be a way for traditional banks to reduce brick-and-mortar branches while still offering customer service.

"Metaverse technology has a chance to completely change the financial industry landscape as it goes beyond smartphone banking as it can actually connect online and offline services," Shin Seok-young, a researcher at Hana Institute of Finance, wrote in a report in April. "Already, global financial companies have started establishing bank branches specialized in offering digital experiences to customers with the metaverse in mind."

According to PricewaterhouseCoopers, the global metaverse market is expected to grow from $45.5 billion in 2019 to $1.5 trillion by 2030.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]