Why fintechs will play a key role in the metaverse

As in many other fields, this virtual space of the metaverse has sparked a desire among financial innovators to learn how fintech and new fintech solutions can provide financial services in this entirely new world. Metaverse technology to create new business models could lead to the emergence of crypto as a large-scale alternative financial system. Other large companies and smaller fintech companies are also looking to develop digital worlds. These types of digital financial ecosystems can support activities and transactions in the metaverse. 

What is the metaverse?

Image: Metaverse explained: What is it, and when will it get here?

Metaverse (meta + universe) creates a sense of "virtual presence" by combining technologies such as virtual reality (VR) and augmented reality (AR). The Metaverse is an interactive, immersive, and collaborative shared virtual 3D universe. The Metaverse can be thought of as an accumulation of universes, similar to how the physical universe is made up of planets connected by space. Snow Crash, a 1992 novel by Neal Stephenson, already described a vision that went beyond single-game video conferencing software. Massive online social games like Fortnite, Battle Royale and user-created virtual environments like Minecraft and Roblox exemplify this concept. During the global COVID pandemic, video conferencing techniques were used to connect geographically scattered workers, indicating what is to come.

Following this trend, according to Nick Clegg, Facebook’s vice president of global affairs, the introduction of metaverse—"a new stage of interconnected virtual experiences using technologies such as virtual and augmented reality"—will bring similar consumption. Metaverse is expected to become an important digital platform for personal and business interaction (including finance). In fact, it is believed that financial data management and financial transaction management that match real life provided by financial technology solutions will be the most important meta-universe, making meta-universe as indispensable as real life. Games that provide digital assets for purchase, such as World of Warcraft and Habbo Hotel, are examples of the appearance of the meta universe. 

According to Rev Lebaredian, Nvidia's vice president for simulation technology, "We are talking about creating a reality that is richer than the real world. Virtual places are permanent objects and the identities that move between them allow digital goods and identities to move from one virtual world to another, much like in our augmented reality world."

But not everyone is so confident that the metaverse and digital assets will evolve to the point where fintech companies will need to manage, sell, or otherwise manage them. It is unquestionably true that almost all major tech players want to “own” their unique metaverse, not just Microsoft and Facebook. 

How will digital platforms contribute to the experience of the digital world?

At the heart of the metaverse's capability are social media and video game companies that leverage their vast user bases, creation platforms, interactive digital events, and state-of-the-art hardware to build the foundation of the metaverse. While it seems that the focus will be on virtual reality, digital assets, blockchain, cryptocurrencies and more often video games, in reality the metaverse will offer much more comprehensive and limitless opportunities for many industries. Whatever form the metaverse ultimately takes, its emergence will require technological evolution in infrastructure, consumer-centric hardware, platforms, and more. For these developers, the metaverse will be their workplace, whether they are creating a new game, digital objects, or entire virtual worlds. In the metaverse, digital platforms will greatly contribute to the experience of the digital world. By launching an immersive experience with a virtual reality viewer, you can work, play video games, buy digital items, chat with friends, and consume multimedia content while in the metaverse itself. In short, Facebook's Zuckerberg describes the metaverse as a virtual environment in which you can be present with other people in a digital space.

The meta universe is a virtual world, in which there are things similar to what we have in the real world, a well-functioning economy, and places where we can go to communicate with others. This is a shared virtual world where you can buy and sell land, buildings, avatars and even names, usually using digital currency. In this world, users can purchase and access digital products on any digital platform of their choice. Today, the Apple App Store or Google Play are the closest virtual world to us, where you can buy various digital products and use them on multiple platforms.

Aside from the gaming and video conferencing patterns, perhaps the most significant appeal of the metaverse to the average consumer is shopping and retail. Today, brands and retailers are trying to stimulate new forms of customer interaction in the metaverse to sell more products, fintech companies are seizing the opportunity to capitalize on new financial needs, while many startups are creating entirely new virtual products from avatars. to cryptocurrencies. As a buzzword, the metaverse refers to the diverse virtual events, environments and resources that have gained momentum during the online pandemic change. Together, these new technologies suggest what the next Internet will be like.

However, technology companies, mainly Facebook, are increasingly using the concept of "meta universe," a classic science fiction term used to describe a virtual world in which you can live, work, and play. In short, Metaverse is a digital world in which anything we can imagine can exist. Metaverse refers to the idea of ​​shared and permanent virtual space, similar to the digital mirroring of the real world, but without any restrictions. With the development and dissemination of this concept, the meta-universe can now be classified as a fusion of virtual reality and physical reality on the new Internet.

Metaverse is a world that will flourish in the future.

In this world, cryptocurrency and digital art, namely non-fungible tokens (NFT), are commonplace. Combined with the hype surrounding digital assets and cryptocurrencies, companies and futurists began to imagine what it would be like to shop in the meta universe. While technology fans, gaming platforms and social media are busy talking about the extraordinary experience we will have in the metaverse, more and more other gamers are paying attention to other digital possibilities and eager to find new ways to make money and sell goods . In the virtual economy. In just a few weeks, Metaverse has not only become the new favorite of large technology companies, but also the new favorite of the investment industry.

The metaverse is the latest obsession in the tech world, despite being drawn from a dystopian science fiction novel. The Metaverse brings together various technological elements at a basic level, including video, augmented reality (AR) and virtual reality (VR), in which users can exist in the digital world. The boundaries between media, entertainment, technology and video games converge in the metaverse.

What would fintech solutions look like in the metaverse?

Metaverse is predicted to grow in importance as a digital platform for personal and business interactions, including financial transactions. To make this new environment as immersive and realistic as possible, the ability to manage finances and transactions will be critical. The pandemic encouraged people to interact and pay digitally more than ever before. As a result, fintech adoption boomed worldwide. 88% of US consumers now use fintech solutions.

In reality, the most essential indicator of making the metaverse as indispensable as real life will be financial data management and techniques of managing financial transactions supplied by fintech solutions similar to real life. In a virtual world where you can buy and sell houses, products, clothing, land, and avatars just like in the real world, implies a massive economic ecosystem.

There are financial players who rush into the meta world in order to establish themselves as forerunners of the digital finance future. Brokerages and banks in Korea have already begun to construct active virtual environments for their clients, according to the Korea Times in August 2021.

The metaverse - a threat to user privacy?

While it may still be a decade before it takes enough core functionality to make an immersive metaverse experience available, that hasn't stopped the company formerly known as Facebook from taking the first leap in marketing virtual headwear solutions around the world. Oculus seven years ago. But Zuckerberg and his team are far from the only tech visionaries who have ideas for how a metaverse should be shaped that uses a combination of virtual reality and other technologies. And some who have thought about it for a while are worried about the new world associated with the social media giant, which may have access to even more personal data, and accused of failing to stop the spread of dangerous misinformation and other damage online.

From metaverse and fintech to finverse?

In the virtual world of metaverse, the investment of enormous technology organizations has totally changed the principles of the game. It is almost inconceivable for banks and other conventional monetary foundations to remain competitive through every one of the cycles that require fast transformation and creative arrangements. It additionally seems like it will be hard for them to remain competitive if they don't make necessary investments for digital transformation as soons as possible. Working together with fintechs and profiting from fintech innovations to have a presence in this new virtual world will be the quickest alternate way to have a significant presence in the meta world.