A Credit Union Leader’s Guide to the Metaverse

It’s a digital landscape that your kids are probably familiar with, a virtual reality space that is transforming our ideas of interconnected activities, communication, and commerce. But like nearly 75% of Americans, you may not have heard of the metaverse, or if you have, you don’t fully understand what it is. 

Despite that statistic, don’t dismiss the metaverse as another piece of ephemeral tech talk, especially as it will become an essential part of more and more people’s daily lives. In just a few years, one-in-four Americans will spend an hour in the metaverse every day, playing games, buying goods, and chatting with friends. 

Businesses, including financial services providers, are already gearing up to meet them there, with at least 30% of traditional companies predicted to have products and services ready for the digital metaverse by 2026, Gartner reports. With such a rapid transformation on the horizon, it’s a good time for credit union leaders to look into the metaverse as a future avenue for connection and member service.

So what is the metaverse, exactly? 

The metaverse is a shared virtual reality space where people and businesses can come together, interact, and exchange digital objects of value. Metaverse users can hang out, buy services, and enjoy entertainment such as concerts or go on a stroll through virtual shopping malls. 

And by creating (and then carefully outfitting) digital avatar likenesses of themselves, metaverse users take the culture of online gaming into a fully immersive lifestyle experience.

Experts predict the emerging metaverse marks the beginning of a new era of technology integration into business processes, one that has a high ceiling and a forecasted market value of $8 to $13 trillion by 2030. 

Tech companies are leading the charge into this space and providing direction and vision for a wide variety of organizations, including credit unions, that will quickly follow their lead into the digital space. 

For example, Meta, Facebook’s parent company, pledged $150 million to train users and content creators on virtual and augmented reality tools so they can interact more fully in the not-so-coincidentally-named metaverse. Meta’s end goal? To make interacting and conducting daily business and personal activities more seamless in that virtual world. They see more and more people using the metaverse for various daily tasks, including fully interactive, virtual meetings. 

How could this investment in virtual reality translate for credit union use? The metaverse could take the existing concept of loan conferencing to a whole new level. Instead of members coming into a branch to personally connect with a representative, a metaverse-based loan process could allow them to have a highly personalized video experience that still feels like a face-to-face branch conversation but is conducted digitally from any location. 

Microsoft is also actively bridging between the physical and virtual worlds. The company uses emerging metaverse technology to improve real-world business processes, such as increasing efficiency on factory manufacturing lines. For example, augmented reality tech allows manufacturers such as Kawasaki or Boeing to cut down on face-to-face repair visits by using a virtual-reality headset to guide assembly-line workers through the fixes themselves, right there on the job. 

Credit unions could potentially benefit from similar technology, for instance, as they continue the ongoing fight against fraud. Allowing corporate office fraud experts to virtually weigh in on suspicious transactions as digital gatekeepers, in real-time, could reduce the potential for costs to the credit union, as well as fend off digital foes. 

Unique opportunities and challenges for credit unions

Credit unions willing and able to step into the virtual space of the metaverse can also build additional connections with their members while simultaneously reaching out to potential members who are active in the digital world. 

In real life, it’s challenging to have a splashy branch grand opening with activities, giveaways, and attractions every day of the week. But in the metaverse, anything is possible, at any time. Credit unions can attract people to online “locations” through virtual promotions that create the opportunity for meaningful interactions about appropriate products and services. 

Other financial institutions are already experimenting with the prospect. HSBC purchased a digital location within the metaverse where it is networking with gamers and e-sports enthusiasts to anticipate and meet their real-life business needs. 

There’s a whole virtual world of opportunity available in the metaverse; credit unions just need to determine the best way to maximize their metaverse potential while minimizing risk. And because lawmaking generally takes time to catch up to innovation, the metaverse is very much a digital Wild West when it comes to regulation. 

However, the NCUA gave credit unions the green light to partner with crypto-service providers, laying a foundation for secure, virtual cryptocurrency transactions as part of their future service offerings. 

Credit unions operating in the metaverse will also need to create stringent guidelines to ensure they can positively identify their members. That’s because the metaverse’s personal avatars (like the James Cameron movie, the video-game-styled digital representations a customer uses to explore the virtual world) are not required to have any connection to a person’s real-world appearance. 

Providing digital services members demand

Members want to communicate with CU service professionals at the time and place that’s most convenient for them. The no-limits metaverse has the potential to become that space. Thinking creatively, credit unions could establish member connection opportunities such as: 

  • Virtual branch locations. Realistic and interactive online office environments where people can ask member service questions and get information about products and services.
  • Financial literacy resources and programming. While prospective members may find attending an onsite financial literacy seminar challenging, they may be willing to connect virtually and learn more about savings, investing, and retirement planning. Registration for such events allows your CU to build a connection with potential members who may have otherwise never engaged with you. 
  • Lender services. The metaverse will include expansive spaces for consumers to purchase, buy and sell goods and even start virtual businesses. From digital real estate mortgages to large-purchase loans, the potential is there for credit unions to provide similar lending services in the metaverse as you do now in your real-world office. 
  • Payment processing tools. Opportunity abounds for digital wallets and specialized credit card offerings in the metaverse. Your kids already do digital transactions to “level up” through online games; the metaverse will likely require secure financial tools to buy concert tickets or update an avatar’s look.

Streamlined access and uniform experiences

Online banking adoption is skyrocketing, with more than 75 percent of consumers listing the web as their preferred channel for transactions. However, for complicated or multi-step financial transactions, many consumers still want to have a live conversation with a real person. 

The metaverse has the potential to meet both needs by providing a connection point without a physical location. From digital chat rooms to one-on-one video discussions, it allows additional human touchpoints and can provide reassurance for members that their financial matters are on the right track. That’s especially important for processes that can be lengthy or time-consuming, like getting a mortgage loan.

It pays to stay on top of the latest innovations

Credit union leaders and other financial institutions have expressed concern that they can’t survive without brick-and-mortar branches. The branch is still where they establish brand identity within the community and differentiate themselves from competitors. 

As consumer acceptance of digital banking increases, however, many credit union leaders wonder where they’ll connect with younger generations as those potential members start managing their money and head into their prime borrowing years. 

The metaverse could become where young people have their earliest interactions with a financial service provider. They are already exploring the metaverse as part of their daily entertainment some 150 million people log in monthly to play Roblox, a metaverse-based video game. And even fast-food restaurants have begun to direct users to their metaverse locations through themed events that increase engagement in their virtual presence while highlighting a visit to check out their real-world menus to satisfy their game-playing munchies.

Other financial services businesses are already invested in the metaverse, with flashy virtual reality experiences highlighting cryptocurrency that help build a foundation for eventual, more traditional savings and checking transactions. 

Credit unions that don’t have the resources or the desire to employ a team of VR designers can begin building and experimenting in the metaverse space. For example, your credit union might start with games, information about financial literacy, and other simple interactions to see what attracts your members and potential members. Then, make enhancements as the metaverse space evolves and your target audience increases adoption. 

Consider creating a product or feature that puts you at the forefront of the metaverse’s many financial transactions, like a digital wallet that provides a high level of security and enables safe online purchases. 

Building partnerships with forward-thinking organizations

Moving into the uncharted world of the metaverse requires inventive creativity, strategic planning, and flexibility. Because everyone’s learning this space and finding their place, it makes sense to collaborate with other companies that have experience building best-in-class technology resources in the existing digital business world. 

The entry costs to become established in the metaverse can be high, between the hard-to-fathom virtual real estate prices seen in the digital land grab as well as the costs associated with retaining VR developers and other tech talent to set up a digital presence.

But, CU Benefits Alliance can help. We’ve found that making changes to how a credit union structures its employee benefits program can save credit unions up to 30% in the first year alone. And that can help free up resources to start considering the not-so-distant, digital future of financial services.

Set up a consultation to discuss how our resources and expertise allow you to reduce costs elsewhere and allocate funds for development and experimentation as you make your first steps into the metaverse.