Buying into this virtual economy can help CUs connect with previously unreachable demographics and increase omnichannel efficiency.
There is no better time than the present for credit unions to establish their presence in the virtual world and position themselves above the competition. As society continues to embrace all things digital, the metaverse has emerged as a promising digital avenue, providing a network that merges physical and virtual worlds and is intertwined with social connection.
The metaverse has presented credit unions with a new opportunity to reach and connect with potential and current members. In fact, Gartner reports that by 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social media and/or entertainment.
This independent virtual economy will help credit unions increase the efficiency of their omnichannel approach to marketing by bridging their physical and digital identities; it will also help credit unions deliver a more immersive and personal member experience.
Real-Estate in the Metaverse = Endless Opportunity for Credit Unions
Real estate sales on the four major metaverse platforms exceeded $500 million in 2021 and could double this year, according to investors and analytics firms. A report found that the metaverse real estate market is expected to grow at an annual rate of 31% a year from 2022 to 2028.
However, without tens of thousands of dollars on hand, aspiring investors may run into some roadblocks when attempting to enter the market. As a solution, credit unions could consider virtual lending services, including offering a completely digital loan for those interested in buying or renting in the metaverse.
Real land is experiencing low housing inventory, while virtual land and property is easily created with code. As of now, the number of new metaverse platforms that can launch is limitless, which means more virtual real estate can be created, providing credit unions with a chance to originate more loans than ever before in this new lending landscape.
TerraZero Technologies, an integrated metaverse development group, was one the first-ever companies to issue a mortgage in the metaverse. The firm self-financed the purchase and now holds the NFT (non-fungible token) to securitize the mortgaged land. Additionally, TerraZero has built a relationship with a banking partner to expand its mortgage capabilities. Many others may soon be following suit in joining the virtual real estate market.
Virtual Interactions With Loan Officers
Many credit unions adopted digital solutions to better assist members during the COVID-19 pandemic, but financial institutions should continue building upon this momentum to fully tap into virtual interactions. Credit unions can cultivate unified messages that are made personal and shared in the branch, through the mobile app, and now, through the metaverse, encouraging prospects to engage with the credit union no matter their physical location. This can all be executed without the need for direct human contact.
Imagine equipping prospective members with the tools to research and execute the application process on a mobile device, continue the application and upload documents on an alternate digital device and engage with a virtual loan officer for assistance in the metaverse—without losing progress along the way. Members would be able to consult with experts throughout the process. It goes without saying, but innovative products and personalized member experiences are key for member retention and acquisition.
Attracting Younger Members
The innovative capabilities of doing business on the metaverse do not just stop at virtual transactions. Credit unions can begin targeting younger members, such as Gen Z, through financial activities and marketing in the metaverse. From financial literacy games to immersive workshops and 3D branch visits, credit unions can leverage myriad tools to engage with young prospective members.
Online financial literacy games can provide members with accurate knowledge on products while also providing a space for members to connect with each other through engaging competitive activities. Virtual branch visits would expand credit unions’ appeal by allowing members to consult financial experts from the comfort and convenience of their home. Members could try out various products before making a purchase, and the products would be delivered digitally or to their home once the purchase has been made.
Embracing the metaverse and all of its opportunities will not only help credit unions appeal to younger members to begin establishing their financial well-being, but it can also help credit unions create fruitful opportunities to unlock and connect with demographics that can be difficult to tap in the physical world.
With celebrities like Snoop Dogg and Paris Hilton leading the pack in investing in metaverse real estate, it is safe to say this new world has everyone’s attention. We could eventually start to see credit unions offer services much like they do in the physical world, including credit and debit cards, mortgages and other loans. Credit unions have a few years before they have to completely buy into the metaverse, but those who make the move early will see an increase in member acquisition and satisfaction through a graphically rich, virtual banking experience.
Kyle Smith is an account associate at William Mills Agency, the nation’s largest independent public relations firm focusing exclusively on the financial services and technology industries. The agency can be followed on Twitter, Facebook, LinkedIn or its blog.