• Sabrina Akramova, Editor & Content Manager at Financial IT


• 23.02.2022 10:30 am
#fintech #metaverse #payments #gaming #NFT

We live in an era of rapid changes and economical challenges, partly caused by the pandemic COVID-19. Aiming to simplify our business communication, work processes, and payment methods, most tech giants offer diversified products and services. As a result, we have witnessed major business campaigns, including Facebook’s rebranding as Meta. 

Metaverse innovator opens up new prospects for organizations aiming to incorporate fintech solutions into the virtual universe of the digital environment. Many internet users, especially video gamers, comprehend the concept of the metaverse due to their degree of familiarity with the principles of virtual and augmented reality. 

The degree and types of technology used in the metaverse enable more engagement, autonomy, and boundlessness. It's also notable that non-game businesses are increasingly curious about whether virtual settings like the metaverse may help them engage customers beyond the traditional shop and smartphone app.

The rise of financial services in the metaverse

Access to financial services online has been a crucial driver of fintech innovation over the last decade, much as Google did with information and Amazon with consumer goods. The pandemic significantly boosted this digital interaction, and now the fintech industry in the UK is expected to rise by  £12 billion this year. Following this trend, consumers are most likely to demand the same level of access to financial services as the metaverse itself. 

Facebook just introduced Novi in the US and Guatemala with Coinbase as the pilot's custodial partner. To be precise, it means Facebook will use blockchain to power metaverse transactions. Blockchains are already used in emerging metaverses – in video games and NFTs. While many may point out the distinctions between online gaming worlds and the metaverse, Microsoft's recent $68 billion acquisition of gaming giant Activision was a big shot across the bow of those who dispute tech corporations' high priority for the metaverse.

Video games dominated the metaverse long before the phrase was coined. Games provide interesting gameplay that keeps consumers coming back for more. Cryptocurrencies are currently being used in-game more frequently than fiat currency since they can be used cross-border more readily than fiat currencies. As regards NFTs, Twitter intends to let authors connect their crypto wallets to distribute tokens. In a metaverse, NFTs might help producers sell their material directly and develop online communities.

Back in 2015, eBankIT showcased how it used augmented reality to bring printed papers to life on smartphones. In 2017, we witnessed how PropTechs (Property Technologies) started using VR/AR tools to give tours of existing and future homes. In order to conduct special virtual tours of three reward categories, Mastercard released a new AR application later in 2020. 

Undoubtedly, fintechs and financial services firms are becoming aware of the metaverse's potential. For instance, brokerage firm eToro unveiled its MetaverseLife (which includes сryptocurrency and blockchain-based platforms like Decentraland and Enjin) offering a couple of months ago. 

The future of fintechs in the era of metaverse

What can we anticipate from fintechs and financial services firms as they embrace the metaverse? First of all, financial services organizations are most likely to use the metaverse to connect with clients at first. Notably, several fintechs and financial services firms have already taken first moves in this direction using AR/VR. There are some bright examples of how ‘virtual towns’ on metaverse platforms with special business centers and recreation areas helped increase the level of customer integration. South Korea already entered the metaverse in November 2021 with a “Seoul Vision 2030 Plan” worth €2.8 billion. 

If the metaverse has its own economy, we should expect a proliferation of enterprises catering to its residents' financial demands. In such a future, digital identity, and authentication providers, as well as financial data management and financial infrastructure providers, will play an important role in facilitating value exchange in the virtual environment. Companies that develop virtual assistants and other AI-powered financial services agents should also have plenty of work to do in expanding up the metaverse. 

NFTs as the product of metaverse and fintech 

Although metaverse is to be explored yet, fintech startups could benefit from such integrations. Larger fintech companies could invest into creating their own metaverses, just like Coinbase did with its NFT marketplace. Due to simplicity and availability, in the near future, the number of people involved in purchasing and trading processes of NFTs will significantly rise. 

While customers may buy NFTs directly from a developer, a burgeoning online community of NFT markets has formed where buyers can browse through various sorts. Companies including Time Inc., Walmart, Fox Entertainment, the NY Stock Exchange, and Gucci have all either issued or announced plans to issue NFTs. People and organizations may now use NFTs to monetize both physical and digital assets they currently own or can readily develop. 

Conclusion

Although how metaverse will look like in the future is unknown yet, there are already significant benefits. Thanks to the metaverse, the fintech sphere is already correlated with the gaming industry, which makes it even more interesting to explore. Metaverse allows tech giants to collaborate, share experiences and meet in the so-called ‘virtual world’ with pre-designed business centers and recreation areas. Payment systems have never been so simplified and diversified, which allows companies to reach the maximum amount of potential customers and partners.