Addressing the tiger in the room: Three experts share thoughts on Chase’s moves in the metaverse
- Chase’s move to the Metaverse is still sparking ideas regarding the future of banking.
- From the dawn of a new banking era, to just your unabashed marketing stunt – here’s what a few experts have to say about the largest bank’s recent news.
In February JPMorgan Chase became the first bank to dip its toes into the metaverse. The bank opened a lounge in Decentraland, currently one of the most popular metaverses.
The lounge is called ‘Onyx Lounge’ – referencing Chase’s permissioned Ethereum-based services.
- The lounge is located in Metaiuku, the virtual version of Tokyo’s Harajuku shopping district.
- There’s a tiger wandering around on the first floor as well as a portrait of Jamie Dimon hanging on the wall.
- On the second floor, the visitor’s avatar can check out what experts are saying about crypto.
Along with revealing its adventures into the metaverse, JP Morgan also published a report outlining the revenue opportunities this virtual reality could offer: $1 trillion in annual revenue.
Among the things that could bring in the big bucks are NFTs, which currently have a collective market cap of $41 billion. Transactions are another space. $54 billion every year goes to spending on virtual goods.
JPMorgan Chase launched its lounge in Decentraland, the first of its kind in terms of being powered by the Ethereum blockchain. Users can transact inside this reality with crypto wallets.
Decentraland has been getting a lot of attention recently. MANA, one of the virtual world’s native tokens, rose in value by 80% after Facebook announced its rebrand to Meta, emphasizing its focus on the metaverse.
People, companies, and countries have all been peeking into Decentraland, from Barbados signing an agreement to establish a virtual embassy in January, to Binance establishing its digital headquarters there.
But with that being said, it’s interesting to see how many takes you can get on this one move. Is it a symbol of virtual banking or just a marketing stunt?
Tearsheet turned to three industry experts to get their thoughts.
Dawn of a new era, plus a way to zero in on millennials and Gen Zers
To Andrew Lokenauth, investing and banking professional who's held senior positions at Goldman Sachs and other major financial institutions, JPMorgan Chase’s move is a preparatory one. The great Wealth Transfer is creeping up, and Chase may want to spruce up its services and presence in a way that could especially appeal to its new, freshly unpimpled audience.
“Many Millennials and Gen Z are already glued to their phones. Many already prefer to use apps or text rather than pick up a phone or go to a physical branch. We are nearing the end of brick and mortar locations. The world we live in is all about convenience,” said Lokenauth.
“Banking will be as simple as putting on a headset in the comfort of your own home, and conducting banking in the metaverse. COVID helped to show that people love working remotely, banking will soon follow.”
Entrance into virtual banking
According to Dave Donovan, head of financial services, North America for Publicis Sapient, even though Chase’s Metaverse move is mostly symbolic at the moment, it does speak to the potential of virtual banking.
“Having virtual bank branches is a great seamless alternative to getting in your car and going to a physical bank branch. Consumers can now enjoy personalized banking services in the comfort of their home in, potentially, a much more immersive way,” said Donovan. “All traditional services can be serviced through this channel.”
The move sort of allows Chase to set up shop in preparation of new financing opportunities, including virtual real estate – a space that’s growing in popularity. Investors have been paying millions for these properties, with prices for lots inside the metaverse rising by up to 500% in the last few months.
“JP Morgan sees the opportunity and is looking to establish a brand as the metaverse bank of choice. The key bank opportunity will be creating a flexible financial services ecosystem or platform that allows consumers to seamlessly move from the physical to the virtual world, providing easy, frictionless, and personalized experiences across e-commerce, payments options and wealth management,” said Donovan.
Of course, the move could also be just a cute little marketing stunt.
Giving the metaverse some razzle dazzle could benefit Chase. The lending giant has a lot of investments in companies like Consensys, an ethereum software company. That means it has interest in boosting blockchain hype, says Cory Klippsten, founder and CEO of Swan Bitcoin.
“The latest incarnation of metaverse hype is unlikely to progress further than the 2013-era VR/AR hype cycle, which was pushed by many of the same VCs. The term has recently been co-opted by promoters of non-Bitcoin cryptocurrencies for marketing reasons, like the equally fuzzy 'Web 3,'” said Klippsten