HSBC Holdings is making its next big move by unveiling a metaverse portfolio for its wealthy Asian clients.
The British bank has launched a fund to capture investment opportunities in the metaverse for its rich clients in Hong Kong and Singapore as financial services companies tap into Silicon Valley's new virtual reality.
In a statement released on Wednesday, HSBC said its Metaverse Discretionary Strategy portfolio, managed by its asset management arm, will focus on investing within the metaverse ecosystem across five segments - infrastructure, computing, virtualisation, experience and discovery, and interface.
The metaverse comprises a network of virtual environments accessed via different devices where users can work, socialise and play. It has come into sharper focus since Facebook changed its name to Meta last year to reflect its bet on the sector.
HSBC's venture into the virtual world comes as the British-based lender slashes its footprint in the real world, recently announcing it would cut a further 69 branches in Britain as its customers move online.
The world is undergoing a phase shift in ownership from the real world to the digital world and the metaverse is a term used to describe the digital worlds that will encompass that ownership.
The metaverse as it stands ‘today’ is a variety of web 3.0 applications of various levels of interactivity and adoption. It is in its complete infancy with massive growth potential.
One of the earliest metaverse worlds was Decentraland — a collective and virtual space created by the convergence of virtually enhanced physical reality and physically persistent virtual space. In this virtual space, users can acquire digital assets, goods and services, and even real estate. Another growing metaverse world is The Sandbox — an expansive virtual world built for users to virtually play, build, own, and monetize their virtual experiences. Creators can now earn for their innovation, and the community aspect of it is what is driving adoption.
Users in metaverse environments like Animoca's The Sandbox can buy land, walk around as avatars, play games and meet friends.
HSBC said its discretionary portfolio was designed for its high net worth and ultra-high net worth professional investors and accredited investor clients in Hong Kong and Singapore.
Last month, HSBC said it was buying a plot of virtual real estate in an online gaming space, becoming the second global bank to invest in a popular metaverse platform after JPMorgan set up a presence in blockchain-based Decentraland.
HSBC is putting $3.5 billion into its wealth and personal banking business, in line with its ambition to become Asia's top wealth manager by 2025.
Global wealth managers, including UBS and Credit Suisse, have been ramping up headcount in Asia as countries such as China and India minted more billionaires and millionaires.
HSBC aims to create innovative brand experiences for new and existing customers in its expanded virtual world.
Felix is the founder of Society of Speed, an automotive journal covering the unique lifestyle of supercar owners. Alongside automotive journalism, Felix recently graduated from university with a finance degree and enjoys helping students and other young founders grow their projects.