Financial groups jump on metaverse bandwagon as new business strategy - Korea Times
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Financial groups jump on metaverse bandwagon as new business strategy

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By Yi Whan-woo

Financial groups are capitalizing on "metaverse" ― a virtual environment where users interact through digital avatars ― to host meetings, promote products and expand digital marketing services.

But this new management strategy is costly and does not guarantee profits in the short term. It, however, is critical to woo millennials and Generation Z, who as the next major banking customers, are very interested in virtual technology, augmented reality and other cyber technologies, according to industry sources, Monday.

DGB Financial Group held executive meetings twice on Zepeto, an avatar app backed by the country's internet behemoth Naver with more than 2 million subscribers.

Hosted by DGB Financial Group Chairman and CEO Kim Tae-oh, the participants, including CEOs of group affiliates, donned 3D animated avatars to make an appearance in the metaverse.

"This was quite a scene, considering many participants were from the older generation who consider avatars as mere toys, not business tools for communication," a source said.

A DGB official assessed the meetings were "effective to promote the group's brand image in cyberspace and better appeal to millennials and Generation Z."

The official said the firm is considering opening a cyber bank, adding it "will be a new channel for customers."

Shinhan Financial Group has jumped on the metaverse bandwagon as well, launching a fund worth 300 billion won ($265.4 million) to accelerate digital innovation and also by opening Digital Innovation Wheel, the main office of the group's taskforce aimed at nurturing digital financial services.

Lim Young-jin, president and CEO of the group's credit card arm Shinhan Card, met professor Kim Sang-gyun at Kangwon National University, one of the country's metaverse experts, and signed an agreement for cooperation.

"The cooperation will include measures to enhance communication with Generation Z, with the metaverse being a connecting vehicle," a Shinhan Card Official said.

Nonghyup Bank, a Nonghyup Financial Group unit, held a brainstorming session led by its digital R&D center.

Kwon Jun-hak, the bank's president and CEO, joined the meeting and called for the development of digital platforms designed to improve customer services.

"Digital innovation is a matter of the banking industry's future and we need to make efforts accordingly," Kwon said.

KB Asset Management, which operates under KB Financial Group, has launched the industry's first metaverse fund.

The firm invests in stocks of Facebook, Apple, Microsoft and Naver as well as other IT companies in and outside Korea that have advanced into the metaverse business.

Global consulting company PricewaterhouseCoopers estimates the metaverse-related economy will grow from 50 trillion won in 2019 to 540 trillion won in 2025 and 1,700 trillion won in 2030.

Yi Whan-woo

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