What is Virtual Banking?

Continued from Yesterday

"There were a lot of big companies that came into Second Life with the idea that this is going to be the next big medium that especially young people are going to get into," said Wagner James Au, a former contractor for Linden who writes for Mediabistro.com's SocialTimes Pro website and is the author of "The Making of Second Life: Notes from the New World."


"The main problem is that the software was and to a certain extent [still] is not mass market," Au said. "It's not user-friendly enough to be mass market, especially compared to an iPhone game or Facebook games."

Another issue for banks and other businesses considering virtual worlds as a way to interact with customers is justifying its use when they have online banking and mobile applications at their fingertips.

"They really … struggle with that," said Robert Bloomfield, a professor and director of the Business Simulation Laboratory at Cornell University who has studied virtual-world economies. "Why is it that someone is going to want to do banking … in a virtual world?"

Wells Fargo & Co. tested its own private virtual world, Stagecoach Island, with Linden in 2005. It moved the program, which is mainly for young adults but is open to anyone 13 or older, including non-Wells customers, to another technology provider in 2006. The program is still available today.

The focus is on financial education. Participants get jobs, build homes, take out mortgages.

"It mimics real life as much as we can," said Gina Ballenger, the vice president of social media development at the San Francisco bank.

Like Second Life, Stagecoach Island has its own currency, which are shells. Each user starts out with a specific amount of shells with the ability to earn more based on activities. Within the environment are Wells Fargo automated teller machines for withdrawing shells, though they cannot be converted into real currency.

Thwakk, the Amsterdam, N.Y., startup behind Altra's virtual world, offers its Mo'doh Island as both a stand-alone version that banks and credit unions can customize with their own branding and a more generic version of the program that is housed in Second Life.

The company's focus is on helping clients deliver financial literacy tools "by providing the power of these virtual worlds … to their youth membership," said Scott Moriarty, a founder of Thwakk and its chief executive.

http://www.americanbanker.com/issues/176_81/virtual-banking-worlds-provide-tangible-lessons-1036619-1.html

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