HSBC, one of the world’s largest financial services conglomerates, has just entered the metaverse. The financial services giant, in the middle of March, partnered with The Sandbox to purchase digital real estate in the virtual world.
As the world’s biggest financial services empire, they are expected to leverage their first-mover advantage to become leaders in the metaverse. What does it mean to the industry and how becoming an NFT stock is set to affect HSBC?
HSBC in the metaverse club
In an announcement, The Sandbox explained that HSBC had purchased a large chunk of land in its virtual world. The purchase is part of HSBC’s symbolic move into the digital space, with the bank looking to keep pace with some of its biggest competitors in the ever-changing digital landscape.
Speaking on the rationale for the move, HSBC explained that it would collaborate with The Sandbox to build initiatives for engagement across different fields, including sports, gaming, and entertainment.
“Through our partnership with The Sandbox, we are making our foray into the metaverse…. We’re excited to be working with our sports partners, brand ambassadors, and Animoca Brands to co-create experiences that are educational, inclusive and accessible”, said Suresh Balaji, the Chief Marketing Officer for HSBC’s Asia-Pacific region.
The game’s developers are also especially keen on HSBC, Sandbox, and the metaverse, claiming that the bank wants to engage users on financial literacy topics. Sebastien Borget, The Sandbox’s co-founder, heralded the move as the first step towards broader adoption of Web3 technologies, especially for several of the world’s largest organisations.
Increased Exposure means metaverse Isn’t A Fad
Contrary to what The Sandbox has reported, HSBC isn’t the first financial institution to plunge into the metaverse. Investment banking giant JPMorgan made a similar move in February, opening a virtual headquarters in Decentraland’s Metajuku Mall. Still, HSBC’s entry into the metaverse is a big deal.
The metaverse has already become a growing trend across multiple industries. Last year, we saw the metaverse craze grip the tech space, as companies like Microsoft and Apple quickly revealed big plans for what they believe will be the future of online social interactions.
Echoing its belief in the metaverse, Facebook even changed the name of its holding company to “Meta” in October. While the trend has continued, JPMorgan and HSBC have jumped into the metaverse. And all signs point to other banks making similar moves soon.
When JPMorgan opened its Decentraland-based virtual office, the banking giant shared a report detailing how the metaverse could be a trillion-dollar opportunity for global brands in the future.
In its report, the Wall Street giant explained that the metaverse would easily infiltrate every sector of the global economy in the coming years, with the potential for $1 trillion in annual revenues. JPMorgan highlighted that the average price of virtual land jumped by 100% between June and December 2021 alone, with in-game ad spending expected to hit a staggering $18.4 billion per annum by 2027.
“This democratic ownership economy coupled with interoperability could unlock immense economic opportunities, whereby digital goods and services are no longer captive to a singular gaming platform or brand”, concluded the banking giant.
First-Mover Advantage For Early Adopters
The metaverse essentially promises to take online interactions away from the platforms we see today and into more immersive experiences that will serve users even better. By moving quickly, brands like JPMorgan and HSBC (in business)—as well as companies like Meta (in tech), Adidas (in sports) and more—will be able to dictate how the metaverse affects their fields.
Of course, this isn’t to say that the first movers will remain the industry leaders forever. MySpace hit the idea of social media before Facebook but is essentially nowhere to be found today. MoviePass came up with the idea of paying flat rates to consume movies for a period first, and it even struck gold in its initial phase. Sadly, the service ended, giving rise to Netflix instead.
However, in a world where technological advancement and access to data have become more readily accessible, becoming the first to break into a new space vastly improves your chances of solidifying your place as the leader there. The metaverse is starting to see its leaders as it expands to touch every major facet of the global economy. And the more big names join the fun, the easier it will be to distinguish a rug pull project from a true winner.