Wednesday, February 25, 2009

Virtual Banking (20) Westpac

I've been pretty extensive in blogging banks that immersed themselves into Second Life, but here's one I never noticed; Westpac.

The following article is grom Virtual Worlds News: UPDATED: Australian Bank Westpac Exits Second Life

In November 2007, the Australian bank Westpac had set up shop in Second Life for
internal use. According to a ZDNet article from the time citing then-CTO David Backley, IBM and Westpac had experimented (with positive results)with using the virtual world for centralised onboarding for staff from offices around the country. The National Business Review reports today, though, that the bank has cut the project in
spite of positive feedback. [Update at bottom]

It sounds like the results weren't enough. Backley joked that he's now GM of application development ("Read into that whatever you will") and said that returns weren't strong enough to support the project.

"Failures can become expensive. We do massive systems rollouts and we expect huge paybacks," he told the Enterprise 2.0 Executive Forum in Sydney.

I don't point this out to sound the death knell of Second Life as Valleywag has (earning it a link from the National Business Review) or any number of publications. I think it's silly to look at the departure of one project as the tipping point, especially since that one project was likely generating more money for IBM as a technology partner and consultant than Linden Lab through land sales in Second Life.

I think it is worth noting the reaction that companies like Westpac are having. For one, it entered Second Life long before Linden began to seriously refocus the virtual world to serve enterprise customers needs. For another, in the current economic climate everyone, possibly especially banks, is looking to cut costs.

Experimental efforts, which I think is what most organizations label virtual world projects, are attractive because they're a new option to save money, but there's an ever-increasing need to show ROI--and apparently enough of a return that you don't get demoted.

UPDATE: Metaverse Journal was also at the event where Westpac's efforts were discussed and has a much more positive takeaway than the National Business Review: Westpac regarded the effort as a project ahead of its time, but the costs of maintenance and implementation were too high and a key sponsor left the company, stalling momentum. The new insight here is less about corporate reactions to Second Life and more about the media's: fyi, there's still some bias against it.

To learn how to successfully take advantage of virtual worlds for business, come to the 3D Training, Learning and Collaboration conference taking place April 20-21, 2009, in Washington, DC.

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