Berlin, Frankfurt, San Francisco A masked man with a gun storms into the room and shouts: “Hands up, nobody’s moving!” A bank robbery, enormous stress for the employees of the bank, how can behavior in such an exceptional situation be trained?
Bank of America has long worked with video, but recently it has started using the Metaverse to train its bankers. It is precisely recorded how those affected react and how much time they need for this. Main learning goal: keep calm and assess the consequences of certain reactions.
The simulated bank robbery in cyberspace shows that many companies from the financial sector are now using virtual reality in a very practical way. But that doesn’t mean they share the vision of Facebook founder Mark Zuckerberg, who has such high hopes for the Metaverse that he renamed his company “Meta.” The fear is growing that the hype will be followed by great disillusionment.
In at least one respect, Zuckerberg succeeds in his vision: Almost everyone in the industry is testing how to make money in the virtual world and temporarily set up in the Metaverse. Whether and when the test will become regular operation is a completely different matter. While some players smell a trillion market, others warn against dangerous exaggerations.
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The range of projects is just as wide. While some are content with chic virtual meeting rooms for marketing or training, others are already speculating with virtual real estate that only exists in the Metaverse.
The avatar as an insurance consultant
Looking through data glasses at a future lab in Berlin shows where the future of advice at the insurer Ergo could go. Employees and customers no longer have to meet physically or communicate via jerky video conferences.
In virtual reality, consultations, employee training and team meetings can be arranged in a deceptively real environment. So real that the first steps feel like the very first driving lesson, in which you had to familiarize yourself with the steering wheel, accelerator pedal and brake at the same time and move on the road without harming yourself and others.
Different rooms are available, from the small counseling room to the large town hall. Everything is embedded in the most modern architecture, the view through the window shows forest and meadow. An avatar accompanies the conversation and advises.
According to Ergo, the first real customer applications will be available shortly. “We will initially offer the same products in the Metaverse as before, but we can present them there virtually,” says Digital boss Mark Klein.
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The insurer’s project is one of the more classic metaverse applications. Virtual reality, in which people move in artificial three-dimensional spaces, exists in many forms, for example in the medical field, for training, but above all in the billion-dollar industry of “gaming”, online games.
One of the Metaverse optimists is Wall Street giant JP Morgan, which opened the Onyx Lounge on the Decentraland platform back in February of last year. A virtual 3D room in which avatars can learn more about Onyx, the blockchain unit of the big bank, the decentralized database technology that is also behind the most popular cryptocurrency Bitcoin.
JP Morgan senses a trillion opportunity
“The metaverse is likely to permeate every sector in some way for years to come, with a market opportunity estimated at over $1 trillion in annual sales,” the bank’s report, released at the same time, said. Then, in October, the bank invested in Tilia, a payment service for the Metaverse.
The British bank HSBC also acquired virtual real estate on the “The Sandbox” platform just over a year ago. In Germany, for example, the Global Payments Solutions division uses the virtual rooms to give customers an insight into the Metaverse and to show the possibilities of this platform. The bank is working with partners “to follow the technology and its further development and to identify potential fields of application,” explained a spokesman.
At the end of last year, Deutsche Bank opened a 3D visitor lounge. “The idea behind opening the corporate bank lounge at the Metaverse was primarily to build internal capabilities,” says a spokesperson.
However, virtual real estate does not only offer space for the offers of the companies in the metaverse. As in the real world, they can also be objects of speculation. In the Zuckerbergian metaverse, virtual objects ranging from art to real estate, which are defined based on real real estate, can be traded and financed. The Upland company is already acting as a broker in this area in Germany and brokers, for example, “plots” in virtual London and Birmingham.
New York-based crypto firm Republic Realm announced it was buying a piece of land for $4.3 million in late 2021. Only avatars can enter the property on The Sandbox platform.
Cathy Hackl, a well-known social media consultant in the USA and an expert in the field of virtual reality, is convinced that the Metaverse will be accessible to an ever wider audience in the coming years: The topic of real estate will continue to develop accordingly, because it can already be done today everyone in the virtual world not only buys a plot of land, but also builds on it, rents out a property and sells it again, the American writes in her blog.
In fact, digital land is now traded as an investment, just like real land. Ownership of the digital goods is proven via so-called non-fungible tokens, NFTs for short. Like Bitcoin, these are based on blockchain technology and work like title deeds. Investments are made in virtual worlds such as Sandbox or Decentraland, the two largest existing 3D platforms. Payment is made there only with cryptocurrencies.
Speculation with virtual real estate
Many real estate investors view the hype with skepticism. After “land” was sold on the four largest Metaverse sites for a total of more than $100 million in 2021, according to the website The Dapp, interest has now cooled off significantly. According to the research portal The Block, only between 30 and 50 people are now active as buyers on Decentraland per week, and the transaction volume has shrunk to around $50,000.
A topic that is sometimes painful for the industry cannot be ignored in the metaverse either: regulation. Reneé Fischer, Head of Financial Services in Germany and Austria at the consulting firm Oliver Wyman, points this out. The consultant also says this with a view to cryptocurrencies, which initially started unregulated and triggered a lot of hype until the need to create binding rules became apparent.
Despite everything, Upland co-founder Dirk Lueth is looking ahead with confidence. He explains how different future areas are growing together. “In my view, metaverse, blockchain and artificial intelligence (AI) will be very closely linked in the future.” His example: “I’m using AI to create a bank that consists of virtual branches with digital interiors and where I offer innovative, digital financial products.”
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The branch, the interior items and the digital financial products are deposited on the blockchain, which secures the ownership and makes it possible to transfer the goods at any time. The metaverse is then the virtual place where customers can enter the branch, learn more about the products and trade them. This closes “the triangle of these three future technologies that will lead to significant innovations and disruptions”.
But by no means all experts are so optimistic. “I don’t think there is currently a serious business model for virtual real estate purchases,” says Sebastiano Ferrante, deputy European head of the real estate company PGIM Real Estate, one of the largest real estate managers in the world. A purchase in virtual space is currently “pure speculation”.
If the Metaverse is actually the way millions of people go about their daily lives, real estate could be tradable there, he concedes, but adds: “So far it isn’t, it’s a narrow niche market that doesn’t have any transparency and does not have an appropriate level of maturity.”
Is the hype running out of steam?
Oliver Wyman consultant Fischer sees a certain risk that the Metaverse will ultimately slip into the gaming corner without gaining much importance beyond the group of enthusiastic gamers.
“There was a certain amount of hype about the topic last year, but since then it has flattened out significantly,” agrees Dirk Elsner, head of the Innovation Lab at DZ Bank. Elsner has already undertaken excursions into virtual 3D spaces with his colleagues, but the result was not satisfactory. “Use and convenience were significantly worse than, for example, compared to online banking on a smartphone,” said Elsner. “So the question remains: would customers use it at all?”
In addition, there are still many legal questions, for example on the subject of data protection. “The technology is not yet ready for the mass market and is still a vision,” concludes Elsner. In perspective, however, the topic could be of particular interest to younger customer groups.
Even Lueth advises caution without becoming pessimistic. The founder states that the hype was “a little too big, which is now being corrected”. This does not mean that the Metaverse will disappear: it is already omnipresent today and will continue to grow strongly with new technologies and access devices.
Lueth says: “You just have to watch your children how much time they spend in virtual games, for example on the Roblox platform – and how much money is spent there.”
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