The credit union experience was built with person-to-person interactions in the branch. As technology advanced, credit unions and members expanded their ability to connect.
The metaverse might be the next evolution in this connection. But first, what is it?
“It’s a seamless convergence of our physical and digital lives, creating a unified virtual platform and communities for us to reinvent how we work, play, socialize, and transact,” says Vlad Jovanovic, innovation team manager at PSCU. “It's the evolution of the web as we know it: that web3 experience that's delivered with the help of software and hardware creating immersive virtual and augmented reality experiences.”
PSCU’s innovation team started researching the metaverse early in 2022, exploring platforms like Decentraland, The Sandbox, and Horizon Worlds. Virtual reality goggles allow people to step into the metaverse, which operates on a blockchain, although many of the worlds can also be accessed like a normal website.
“Is this the next great social platform where people will go to interact? Well, it's still relatively new. Some say it's only built to 1% of its potential,” says Scott Young, PSCU vice president of innovation and design. He’ll address the 2022 CUNA Operations & Member Experience Council and CUNA Technology Council Conference in Las Vegas.
“But if you're a betting person and you’ve followed the evolution of other social interaction platforms, it seems logical that the metaverse might be a destination where many eventually venture to,” he says.
How can credit unions build a presence in the new digital ecosystem?
As currently constructed, the metaverse doesn’t offer commerce on a large scale, and financial institutions aren’t currently offering transactional services on the platforms. However, credit unions can market themselves, meet members, increase brand awareness, build financial literacy, and educate their communities.
“I want to help credit unions be everywhere their members are,” Young says, suggesting credit unions conduct surveys to gauge member interest. “If some members are already participating in the metaverse, I want to be there to accommodate them.
“Simply put, you might consider the metaverse as yet another channel to interact with members,” he continues. “You have in-branch traffic, digital banking traffic, social media traffic, and now metaverse traffic.”
Credit unions that add the metaverse to their repertoire can purchase land to set up virtual branches. As in the real world, buying land in the metaverse costs money. People can spend $450,000 to own land near Snoop Dogg, or find something for a couple thousand dollars in less expensive sections of the metaverse.
Before purchasing land, Young and Jovanovic suggest assembling a team of employees to conduct research and development. Because the metaverse lives on the blockchain, there are data trails that could allow credit unions to track the number of visitors to virtual branches, accumulate data, and understand their members.
If the transition to commerce happens, Jovanovic believes companies that get in early may be able to use their data and investments in this space to best address consumer needs.
Currently, metaverse commerce includes users buying NFTs (nonfungible tokens) or purchasing items for their avatars. Walmart developed a proof of concept where people can enter the metaverse, “walk” through a store, get help from a virtual agent, make a purchase, and have Walmart Plus deliver the items to their real-world homes.
“That's why I think the metaverse is here to stay: the huge opportunity around commerce and immersive social experiences,” Jovanovic says. “Retailers are going to build out experiences to make it easier and more attractive to go shopping and personalize that experience. Those experiences will power the metaverse of tomorrow."
Financial institutions could theoretically progress the same way. If they do, Young says members could access their accounts that exist in the physical world by communicating virtually with a credit union employee.
Today, metaverse transactions are conducted through digital currency, which differs on each platform. However, PSCU is working with its partners, who are exploring the space from a commerce perspective.
Jovanovic says companies like MasterCard are laying the groundwork to partner with many metaverse platforms in a way that would allow users to make purchases with their credit and debit cards. This would likely increase consumer adoption.
Currency and commerce aren’t the only aspects of the metaverse still being ironed out. Fraud and identity will also be essential factors to consider going forward.
Jovanovic believes there should be a unified set of credentials in terms of authentication. With no single person or company owning the metaverse, standards will likely need to be set to ensure portability of digital assets acquired on any particular metaverse platform.
Interoperability between different metaverse platforms is key to wide adoption of these new experiences.
For now, Young says the metaverse is a bit like the Wild West. He wants credit union leaders to be aware of it and understand that the metaverse is truly in its infancy.
“Don’t be dismissive,” Young says. “Be curious, watch that space, and see how new use cases evolve and emerge.”