Fintech allows for a stronger sense of engagement,
autonomy, and boundlessness in the Fintech industry
A metaverse is a three-dimensional virtual cosmos that mixes
augmented and virtual reality with social media technologies to create a simulated
digital environment at its most basic level. For some in the digital world,
particularly in video games, the concept of the metaverse is simple. Whether
it’s the (often) mild-mannered virtual landscapes of simulation-based games or
the action-packed digital worlds of RPGs and shooters, gamers have long admired
the concept of choosing a character and entering a reality vastly different
from the actual one. The degree and types of technology used in the metaverse
are unique, allowing for a stronger sense of engagement, autonomy, and
boundlessness. What’s also unique is the increased interest by non-game firms
in discovering new ways to make money.
Mark Zuckerberg and crypto fanatics have one thing in
common: they both enjoy the metaverse. Their vision for the metaverse, on the
other hand, might be entirely different – leading to far-reaching implications
for fintech and digital financial services. The metaverse, which is envisioned
as a 3D virtual environment that allows users to engage in virtual socializing
and virtual enterprises of all kinds, it is still a long way from being a
cohesive, completely immersive virtual reality. Is it merely a speculative
crypto-fuelled craze, or is the hype ever going to meet reality? And yet, as
investment companies and Big Tech spend vast sums of money on constructing
these fledgling virtual worlds and ecosystems inside them, the basis for a
massive shift in payment systems and commercial connections is being laid.
This virtual environment of the metaverse has spurred a desire
among financial entrepreneurs to explore how fintech and new fintech solutions
may deliver financial services in this completely new universe, just as it has
in many other industries. The use of metaverse technology to develop new
business models may pave the way for crypto to become a large-scale alternative
financial system. Other major and small financial firms are also attempting to
create digital worlds. These kinds of digital financial ecosystems can enable
metaverse activity and transactions.
Metaverse and financial services
Audiences at Finovate have already seen how financial
services firms can take advantage of many of the capabilities that make the
metaverse feasible. eBankIT showcased how it was using augmented reality
technology to bring printed papers to life on smartphone displays back in 2015.
In 2017, we looked at how proptech companies were using virtual reality to
provide virtual walkthroughs of both existing and upcoming properties.
Mastercard released an augmented reality app in 2020 that gave users a virtual
tour of three incentive categories. “Every day at Mastercard, we use our
technology and solutions to offer multi-sensory experiences for consumers,”
said Raja Rajamannar, Chief Marketing and Communications Officer at Mastercard.
Fintechs and financial services firms have grown
increasingly aware of the metaverse’s potential. Earlier this month, eToro
announced the launch of its MetaverseLife service. MetaverseLife is a new smart
portfolio that exposes investors to enabling platforms like Meta Platforms and
Roblox, as well as cryptocurrency and blockchain-based platforms like
Decentraland and Enjin. While many are eager to point out the contrasts between
online gaming worlds and the metaverse, Microsoft’s $68 billion acquisition of
game business Activision earlier this month was a big shot across the bow for
those who dispute the metaverse’s high priority among computer corporations.
Social media and video game firms are at the heart of the
metaverse’s capabilities, leveraging their massive user bases, creativity
platforms, interactive digital events, and cutting-edge hardware to lay the
metaverse’s foundation. While virtual reality, digital assets, blockchain,
cryptocurrencies, and, more often, video games appear to be the emphasis, the
metaverse will provide far more comprehensive and infinite prospects for
numerous businesses. Whatever shape the metaverse eventually takes, it will
necessitate technical advancements in infrastructure, consumer-centric devices,
platforms, and other areas.
The future of Fintech in the Metaverse
Virtual Interactions: The most likely way for
financial services organizations to engage with the metaverse at first will be
through virtual interactions with consumers. As previously mentioned, numerous
fintech and financial services firms have taken preliminary steps in this
direction by using AR/VR technologies. Few, however, have carried the notion as
far as Korea’s Kookmin Bank, which constructed a “virtual town” on a metaverse
platform that included a commercial center, a telecommunications hub, and an
entertainment area.
Virtual training: This type of metaverse deployment
can be utilized as a training environment for financial services personnel in
addition to providing customer-facing capabilities. It’s simple to envisage
financial institutions creating and supplying virtual environments to allow
their wealth management teams, financial crime and regulatory staff, and others
to further enhance their talents.
Virtual business: We should expect a profusion of
enterprises catering to the financial demands of metaverse residents to the
degree that the metaverse has its economy. Financial data management companies
and financial infrastructure companies whose job it will be to help facilitate
value exchange in the virtual environment, as well as digital identity and
authentication providers – to say nothing of innovators like Soul Machines –
will all play a significant role in such a world. Companies that create virtual
assistants and other AI-powered agents for financial services will undoubtedly
be important in the metaverse’s development.
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