In a first, Union Bank of India launches virtual banking lounge on Metaverse

Metaverse: Visitors to JPMorgan's Onyx lounge can create their avatars. (Image credit:@fintechfrank /Twitter)

State-led Union Bank of India on July 8 launched a Metaverse-based virtual lounge where it will showcase its products to customers virtually, it said in a release. The lender is the first Indian bank to open a virtual shop for publicity.

“Uni-verse, the Metaverse virtual lounge of the bank, hosts the bank’s product information and videos in the initial phase. Uni-verse will deliver a unique experience of banking to the customers who can roam around the lounge, get information of the bank’s deposits, loans, government welfare schemes, and digital initiatives as if they are experiencing the real world. This initiative is in partnership with Tech Mahindra,” the bank said.

To be sure, Union Bank is not the first lender to open a shop in the Metaverse; US-based JPMorgan Chase & Co achieved that feat earlier this year in February.

JPMorgan launched its lounge on Decentraland, a Metaverse platform. The Onyx lounge is named after the multinational investment bank’s blockchain business that was launched in 2020.

Visitors to the Onyx lounge can create their avatars by choosing a gender, skin tone, hairstyle, clothes and accessories. Visitors are greeted by a tiger avatar and a digital portrait of Jamie Dimon, the bank’s CEO.

As per sources, the country’s largest lender State Bank of India (SBI) is also in the final stages of launching a Metaverse store.

So, what is Metaverse and why is it important?

In simple words, Metaverse is an evolved form of internet. The technology enables real-life experiences and situations with Augmented Reality (AR). Users can do nearly every task using Metaverse. They can visit different stores, enquire and hold conversations with different Metaverse users.

With a rise in use of online banking services, and as lenders increase the share of online loan originations in their portfolios, both domestic and foreign lenders are keen on attracting customers through Metaverse.

Union Bank of India officials said the bank will publicise its products through the Metaverse but due to lack of regulatory clarity, will not be issuing loans directly through the virtual lounge.

Further, the bank intends to showcase the Metaverse lounge through the newly-built digital banking units (DBU), they said. The Centre, had in Union Budget 2022-23, announced setting up of 75 DBUs in 75 districts to commemorate 75 years of India’s independence.

A DBU is a specialised fixed point business unit / hub housing certain minimum digital infrastructure for delivering digital banking products & services. The objective of a DBU is expansion of digital financial services and financial inclusion.

As per Reserve Bank of India (RBI) guidelines, scheduled commercial banks with past digital banking experience are permitted to open DBUs in Tier 1 to Tier 6 centres without having to take permission from the apex bank in each case.