Metaverse And The Future Of Finance
The year 2017 marked a turning stage in the human story. The impact of these changes has been evident throughout our lives. Its impacts continue to create new areas of transformation across the world. Most likely, the largest and most impressive of these changes is taking place in the realm of digital transformation.
Instigated by the pandemic in the world as well as the quarantine measures implemented as a result and the growing interest in cryptocurrency and blockchain The issue to create a virtual identity and digital assets has gained immense importance for companies and individuals.
While the perception was created by cutting-edge technologies like Augmented Reality, VR headset technology and the idea of a virtual world The “Metaverse” was introduced into the lives of many people after Facebook’s rebranding, was the most striking feature of digitalization. Similar to other areas the virtual world has inspired finance experts to think about how fintech and innovative fintech solutions can bring financial services to this new world.
What exactly is this Metaverse?
“Meta” means beyond. The metaverse promises an alternative universe to the world we live in and is built on blockchain technology. It’s a world in which virtual and real-world and augmented reality coexist in space. While the new world is in the conceptualization phase, it is clear that its shape will come from the cooperation of the latest and upcoming technologies and current cutting-edge technological advancements in digital technology.
To give us a new perspective on the Metaverse, we could list some of the features and characteristics of Metaverse.
It will continue to exist in spite of space or time.
While participants are interacting within the virtual environment the participants will be engaging simultaneously in the physical space.
It is an open and accessible platform that is accessible to everyone. Anyone with a connection is able to log on simultaneously.
As a continuation of cryptocurrency, both participants and businesses will be able trade on a brand new value chain that will be recognized by all.
What’s the connection between Virtual Space and Fintech?
It is possible like there’s going to be an emphasis in virtual reality and digital assets blockchain, crypto and , most frequently, video games actually the metaverse can provide many more diverse and infinite opportunities for various sectors. Metaverse is anticipated to become an essential digital platform that can be used for business and personal interactions, which includes financial transactions.
In reality, it is believed that the management of financial data and the techniques for managing financial transactions that are offered by fintech solutions that are comparable to real life is the key indicators to make the virtual world essential as the real world.
Imagine a virtual universe where objects, buildings, clothes or even avatars can be sold and bought just as on the ground. Or where you can stroll around buildings and take part in events that take place in the virtual world. This creates a vast economic ecosystem.
There are financial players who have entered the metaworld rapidly in order to establish themselves as the leaders of technology-driven financial. According to The Korea Times reported in August 2021, brokers as well as banks from Korea have already started to develop interactive virtual spaces for their customers.
Technologies that will transform the Finance Industry in the Virtual World
In the finance 4.0 timeframe we are all aware that the goal will be to render financial service as invisibly and as accessible as is possible. It’s what Amazon does today with e-commerce as well as the way that Google does with data. Metaverse On contrary, provides an entirely new perspective to the entire financial services worlds.
Let’s now discuss the most prominent technologies and financial services that are the pioneers in the creation of the meta-reality universe and will undoubtedly be influencing how finance will evolve in the coming years.
In the world where there is humanity and the wealth it generates whether tangible or digital assets, economic patterns start to appear and the need for cash is beginning to emerge. Therefore, Cryptocurrency is the type of currency that allows financial transactions within the virtual world.
The transactions in the virtual world are completed instantly and safely using the blockchain technology that is behind cryptocurrency. Blockchain technology is also utilized to create smart contracts and can also be used to create a ledger public which determines who is the owner in relation to digital assets.
Blockchain 1.0 consisted of blocks that contained data, and a chain that linked the blocks. Now, in the age of Blockchain 3.0, it is possible to use blockchain technology being used in a variety of areas, including the financial sector. In the world of metaphysics Artificial Intelligence and Blockchain technologies are predicted to create new applications.
Let’s look at an overview of development that blockchain technology has made:
The most popular social media platform, Facebook, with its new name Meta has already invested $50 million in non-profit organisations to help build the metaverse’ responsibility.
As one of the first major tech companies to adopt meta-reality, it’s obvious that Facebook hasn’t changed its name. With its new Digital Wallet technology it introduced as Novi, Facebook seems to have tried to remain competitive in the realm of financial services, too.
In reality, digital wallets as well as blockchain wallets and metaverse wallets have the similar features. Metaverse wallets are limited to some features that are different from other wallets. They let users create or share their digital assets through receiving, storing or transfer tokens. Additionally they are able to earn interest using ETP’s, as deposits do in traditional banks.
Customer interactions are among the aspects that meta reality is set to change to the greatest extent in the field of banking and finance. Indeed, Bank of America has announced that it will offer VR (VR) instruction to 4300 employees to help them keep up with the changing times.
Financial institutions are in the process of taking its AI powered virtual assistants like Chatbots and robotic advisor into the following stage to allow them to adapt to virtual reality and provide more seamless customer experience.
With virtual assistants available to their clients in the virtual world, financial institutions are aiming to:
- Engage in challenging conversations and topics
- Build a stronger relationship and bond with your customers
- Create more emotional relationships to gain insight into the behavior of customers
- Enhance the customer’s satisfaction and loyalty by providing quick and efficient communication
- Track and track customers’ financial transactions
How Banks and other Financial Institutions will Survive
In the virtual world that was created by Metaverse the presence of major technology firms in the race in the world of finance has altered the rules of the game. It’s almost impossible for banks as well as the other financial establishments of traditional to be on their own in the midst of all the processes that require quick change and creative solutions.
It’s also evident that it’s going to be hard for them to remain ahead of the curve if they don’t invest in the necessary capital to transform their businesses digitally from the moment they are. Collaboration with fintechs and utilizing innovative fintech solutions to make a mark in the virtual world that is fresh and in the concept stage, is the fastest way to gain an impactful presence in the metaworld.
Fintech is here to help
The speed of digital transformation and the creation of an asset that is strong in digital in the present will be the best way for you to be an influential player in the coming years of finance.