To many, the metaverse is an enigma. This relatively new frontier is in its very early stage of development, with a great deal of room to grow, change, and expand. Based on the evolution of other social and digital interaction platforms—from Myspace to Facebook, Instagram, and TikTok—it seems possible the metaverse might just be the next digital hotspot.

With this in mind, what opportunities does the metaverse offer credit unions? And how should they prepare to leverage the platform?

What is the metaverse? And who is using it?

First, let’s define the metaverse. A seamless convergence of our physical and digital lives, the metaverse creates a virtual platform and community for consumers to reinvent how they work, play, and socialize. It is the evolution of the worldwide web as we know it—a Web3.0 and blockchain-supported digital platform creating immersive virtual and augmented reality experiences.

The metaverse space has grown rapidly in the past 12 to 18 months, with three main platforms available right now and more under development. As we talk about the metaverse, it’s prudent to assume that most experiences, activities, and offerings are currently proofs of concept as organizations and consumers explore what works, what sticks, and what makes sense in this world—and what doesn’t.

For credit unions, the metaverse is another channel where members or potential members might be interacting. Credit unions want to be everywhere their members are. Currently, there is web, branch, mobile app, and contact center traffic. Looking ahead, there is the potential for metaverse traffic. Younger generations are more apt to be in the metaverse, with some already exploring the space via gaming, NFTs, and otherwise. This group of digital natives is poised to also become a generation of virtual-reality natives, and it isn’t much of a leap to assume they will expect the companies they interact with to have a virtual footprint there.

What are the opportunities?

While there is still a great deal to figure out, including hardware, software, and accessibility for the masses, there are burgeoning opportunities. From the commerce perspective, there are already a number of use cases. Some consumers are buying digital land, while others are buying NFTs and clothes for their avatars or exploring opportunities to reinvent e-commerce with virtual shopping experiences that can deliver items to their physical addresses the next day. NFTs and cryptocurrency are already tightly embedded in the space, with most platforms utilizing their own cryptocurrency. It will be interesting to see how financial leaders like Visa and Mastercard enter a space that is already utilizing decentralized finance.

Some organizations are holding meetings and events in the metaverse. Others are using the opportunity to bolster brand awareness by sharing information about their products and services. For credit unions and other financial institutions, there is an opportunity to establish a virtual presence that would not only further their brand, but also offer financial literacy, educational opportunities, and more to virtual visitors. As an example, earlier this year J.P. Morgan Chase unveiled their Onyx Lounge, which extends the bank’s brand into the virtual realm.

What should credit unions do?

Start exploring. It is early enough that no organization is behind, but credit unions should not be dismissive. The metaverse is yet another new channel to accommodate and meet current and future members. Assign and empower internal teams to educate themselves and the organization about opportunities in this new digital frontier. Be open to exploring use cases to test it out.

Consider setting up a test run: Host an event in the space and see how many members are already there, or survey members to see who would be interested in visiting a virtual branch in the metaverse and what services or offerings they would prefer there. While we cannot predict what the future of the metaverse holds at this stage, be curious, watch the space, and keep a pulse on new use cases as they continue to emerge. This will help credit unions meet the needs and expectations of members tomorrow and into the future. 

Vice President of Innovation Vladimir Jovanovic leads the Innovation and R&D team at PSCU, with primary responsibilities for strategic direction of the company’s Faster Payments, Enterprise Authentication & Identity, and Digital Asset efforts. As PSCU’s lead of Innovation, he’s passionate about harnessing the power of creative disruption with his team, focusing on new technologies and innovations with potential to create new business models. With over 20 years of payment industry experience, Vladimir is a proven payment strategy leader, focused on providing products and services that position PSCU and its Owner credit unions for success.