1. Introduction to Metaverse Fintech
Past years mark watershed moments in human history. Significant changes have occurred in every part of our lives, and their impacts continue to transform the world. Without a question, the most significant advances are occurring in the terrain of digital transformation.
As a result of the worldwide epidemic, the subsequent quarantine measures, and the growing interest in blockchain and cryptocurrency, the problem of developing a digital presence and digital assets has become critical for both individuals and enterprises.
Although innovative technologies such as augmented reality, virtual reality headsets, and the concept of the virtual world contributed to the creation of perception, the “Metaverse,” entered many of our lives rapidly following Facebook’s rebranding.
As is the case with many other industries, this virtual world has provoked the interest of fintech innovators with the help of financial software development services.
To grasp some knowledge on metaverse and the future of fintech, let us discuss it further.
2. Define: Metaverse with Fintech
By merging technology such as virtual reality (VR) and augmented reality (AR), the metaverse (meta + universe) produces a sensation of “virtual presence”.
The Metaverse is a virtual reality that is created with the help of a 3D environment where one can interact, immerse and collaborate.
According to Nick Clegg, vice president of global affairs at Facebook, the emergence of metaverse—”a new stage of interconnected virtual experiences employing technologies such as virtual and augmented reality”—will result in smart utilization.
Metaverse is predicted to develop into a significant digital platform for personal and commercial interaction (including finance). Indeed, it is expected that financial data and transaction management that is compatible with real-life and given by financial technology solutions will be the most critical meta-universe, making meta-universe as vital as real life.
Well, not everyone believes the metaverse and digital assets will expand to the point where fintech firms would be required to manage or sell. It is undoubtedly true that practically all large technology companies, not just Microsoft and Facebook, desire to “possess” their own metaverses.
3. Technologies moulding the Finance Industry in the Metaverse
We are all aware that the goal of the Finance era is to make financial services as transparent and accessible as practical. This is precisely what Amazon is doing now with e-commerce, or what Google is doing with the information. On the other side, the Metaverse provides a whole new reality for all of these financial services environments.
Now, let us discuss the major financial services and technology that have shaped the meta-reality world and will undoubtedly continue to shape the future of digital currency.
3.1. Blockchain Technology
Wherever humans exist and the assets it generates, whether physical or digital, economic processes and the demand for money develop. Thus, crypto assets are the medium of exchange in the virtual world that permits financial transactions.
Virtual transactions are instantaneous and safe because of cryptocurrency’s blockchain technology. Additionally, blockchain technology is used to create smart contracts and as a public ledger to track who owns what in terms of digital assets.
Blockchain 1.0 was composed of data-contained blocks and a chain connecting these blocks. Today, in the era of Blockchain 3.0, blockchain technology is being used in a variety of different areas, including the financial industry. Artificial intelligence and blockchain technologies are likely to provide new applications in the metaverse.
Consider the following brief history of blockchain technology:
3.1.1. Metaverse Finance
Facebook, the world’s most powerful social network, has already put $50 million in non-profit organizations to help feed the ‘create the metaverse obligation.’
As one of the first major internet corporations to embrace meta-reality, it’s evident that Facebook hasn’t just rebranded. Facebook appears to have made an effort to re-enter the financial services market with the new digital objects (digital wallets) technology it unveiled as Novi.
Indeed, digital wallets, blockchain wallets, and metaverse wallets all have similar functionality. Metaverse wallets offer only a few more functions. By accepting, holding, and transferring tokens, they enable users to generate and share their digital assets. Simultaneously, they can earn income through the use of ETPs, just as deposits do in real banks.
3.1.2. Digital Avatars For Assistance
Customer interactions are one of the most significant aspects of finance and banking that meta-reality will alter. Indeed, Bank of America recently stated that it will give virtual reality (VR) training to 4300 workers in order to stay up with this trend like any other metaverse company.
This implies that financial institutions are planning to advance their AI-powered virtual assistant services, such as chatbots and Robo advising, in order to adapt to virtual reality and provide more faultless consumer experiences.
Financial organizations hope to accomplish the following by providing virtual assistants to their consumers in the metaverse:
- Navigate difficult subjects and interactions
- Consolidate your relationship and link with your consumers
- Develop more empathic interactions in order to obtain a better understanding of your consumers
- By offering prompt and effective communication, you can increase client satisfaction and loyalty
- Possess the capability of tracking and recording clients’ virtual financial data
4. How will digital platforms improve the physical world experience?
Social media and video game firms are at the epicenter of the metaverse’s capacity, leveraging their massive user bases, creation platforms, interactive digital events, and state-of-the-art gear to lay the groundwork for the metaverse by creating multimedia content.
While it may appear that the focus will be on virtual reality, digital assets, blockchain technology, cryptocurrencies, and more frequently, video games, the metaverse will really provide far broader and infinite prospects for a wide variety of sectors.
Whatever shape the metaverse eventually takes, its existence will need technical advancements in infrastructure, consumer-centric devices, and platform development, among other areas. The metaverse will serve as a workspace for these creators, whether they are building a new game, digital products, or complete virtual worlds.
Fintech innovations will significantly add to the experience of the digital world in the metaverse. By initiating an immersive experience with a virtual reality viewer, you may work, play video games, purchase digital things, talk with friends, and consume multimedia material all within the metaverse. In a nutshell, Facebook CEO Mark Zuckerberg defines the metaverse as a virtual environment in which users may interact with one another in a digital realm.
The meta-universe is a virtual environment that contains items identical to those found in the real world, a working economy, and locations for communication. This is a publicly accessible virtual environment in which users may purchase and sell property, buildings, avatars, and even names, typically using digital cash by means of a decentralized finance concept.
In this scenario, individuals may purchase and access digital items via their preferred digital platform. Today, the Apple App Store or Google Play Store is the most accessible virtual worlds, where you can purchase and utilize a variety of digital items across many platforms.
Apart from games and video conferencing, the metaverse’s greatest appeal to the typical consumer is probably shopping and retail. Today, brands and retailers are attempting to stimulate new forms of customer interaction in the metaverse in order to increase product sales; fintech companies are capitalizing on emerging financial needs, and a slew of startups are developing entirely new virtual products ranging from avatars to cryptocurrencies.
The metaverse, as a buzzword, refers to the varied virtual events, habitats, and resources that have gathered pace in the aftermath of the pandemic. Taken together, these emerging technologies provide a glimpse into the future of the Internet.
However, technological corporations, most notably Facebook, are increasingly employing the phrase “meta-universe,” a classic science fiction term referring to a virtual environment in which one may live, work and play. In a nutshell, Metaverse is a digital realm in which everything is possible.
The term “metaverse” refers to the idea of a shared and permanent virtual area that is like a digital copy of the real world, but without any rules. The meta-universe can now be thought of as a mix of virtual and real worlds on the new Internet because of how this concept has been spread and developed.
5. Is metaverse a future of virtual reality?
Cryptocurrency and digital art, namely popular non-fungible tokens (NFT), are all over this environment. A lot of businesses and futurists started to think about what it would be like to shop in the “meta world.”
While technology enthusiasts, gaming platforms, and social media are preoccupied with the incredible experience that awaits us in the metaverse, an increasing number of other players are focused on other digital possibilities and anxious to discover new methods to earn money and sell items. In the cybereconomy. Metaverse has not only become the new choice of huge technological businesses, but also the investing sector, in just a few weeks.
Despite its origins in a dystopian science fiction novel, the metaverse is the newest craze in the technology sector. At its most fundamental level, the Metaverse combines several technical aspects, including video, augmented reality (AR), and virtual reality (VR), in which people may reside in a digital environment. The metaverse blurs the distinctions between media, entertainment, technology, and video games.
6. What would fintech solutions look like in the metaverse?
Metaverse’s value as a digital platform for personal and corporate interactions, including financial transactions, is expected to rise. The ability to handle funds and transactions will be important in order to make this new world as immersive and realistic as feasible. The epidemic prompted more individuals than ever to communicate and pay digitally. As a result, fintech adoption has accelerated globally. In the United States, 88% of customers now use fintech solutions.
In actuality, the most critical sign of the metaverse being as necessary as real-life will be financial data management and financial transaction management procedures provided by fintech solutions that mimic real life. A virtual environment in which people may buy and sell houses, products, clothing, land, and avatars in the same way they do in the real world indicates a large economic ecology.
Metaverse becomes new growth engine of financial industry
Financial players are rushing into the meta world in an attempt to brand themselves as forerunners of the future of digital finance. According to the Korea Times in August 2021, brokers and banks in Korea have already begun constructing active virtual worlds for their clients.
In the Metaverse-created virtual world, the entry of large technology businesses into the financial sector has fundamentally altered the laws of the game. Banks and other conventional financial institutions are unlikely to be able to navigate all of the procedures that demand fast adaptation and new solutions on their own.
Additionally, it appears as though businesses will struggle to remain competitive if they do not immediately engage in digital transformation. Collaborating with fintech and utilizing agile fintech solutions to establish a footprint in this virtual reality, which is still in its infancy, will be the quickest path to establishing a significant presence in the meta world.