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Financial services sector’s upcoming renaissance
Published on July 28, 2022
Mr. Ram Shriram, CEO, Mahagram
Numerous traditional and cutting-edge financial service firms are currently conducting experiments in the Metaverse. FinTechs are growing to be an important resource for the market and the economy thanks to their wealth of priceless opportunities.
The metaverse, a three-dimensional depiction of the internet, is the internet’s next evolution.
The Renaissance, one of the most influential eras in history for technology, arithmetic, and art as well as money, accomplished a great deal. The use of linear angles to portray three-dimensional intensity in artwork was refined by Michelangelo and Alberti. In the metaverse of today, we are all on an equal path, and fintech may be the means to that end.
Organizations in the financial services industry have been experimenting with Web3-enabled metaverse settings as well as the more traditional web 2.0 metaverse. In the context of internet 2.0, financial offers companies are using the technology to train employees, expand virtual “economic towns,” telecommuting centers, and interaction spaces, and present digital investment advisory services. Even though these applications are quite developed, they have had little to no influence on the core business strategy in the financial services industry.
We are beginning to notice more creative engagement models in the Web3-enabled metaverse. For instance, HSBC has committed to interacting with e-sports enthusiasts and has purchased virtual land in the Sandbox. NEObank Zelf is launching embedded banking for players of the metaverse via its MetaPass in Discord, while London-based fintech, Sokin, is developing infrastructure for processing metaverse invoices, transactions, and investments. There may be an abundance of financial services companies looking into how the metaverse is being used now.
The figurative mattock method of providing financial services has been superseded by modern businesses creating new products and carrier distribution channels with technology that streamlines infrastructure and steadily improves human intelligence. These sophisticated fintech technologies make it possible to use connectivity as well as aggregate and analyze customer data much more successfully and robustly. This shows that financial providers have been able to reach more clients than ever before, more effectively, and with more targeted goods. Although there is still much to be done in this area, a future financial services market with greater access, price discounts, and transparency is a significant outcome of those efforts.
Acceleration of the digital transition
Fintech has had a significant impact on various businesses and financial services. As an illustration, the banking sector has undergone a significant transformation in recent years as a result of fintech.
Other areas of financial services, such as payments, custody, and compliance, institutional and retail investing, real estate, and insurance, among many others, have benefited from cutting-edge fintech solutions over the past ten years, and this has been amplified by the global health crisis.
It is tempting to suggest that businesses that have perfected the art of making financial transactions accessible at the moment have an advantage going into the upcoming decade of innovation. But that would be a bad guess. The emergence of the metaverse combined with fintech has the potential to improve almost all areas of the financial sector.
The adoption of more advanced digital technology appears to be moving the substantial changes that have affected financial services in the direction of a completely new design. Most financial services areas have some, if not all, contributors that prefer analogue to digital in the past.
In some places, CBDCs and more effective exchange techniques are being used to alter even legal documents like bills and coins (Central bank digital currencies).
Financial services will be reconnected by the metaverse
The goal of the metaverse is to create an open, digital environment where individuals can communicate, transact, and, most crucially, combine physical and digital assets. Its presence necessitates new ways of handling transactions, protecting our identities, and controlling things. A financial services company that struggles with inclusivity may be completely reconnected to its economic core in an immersive online environment thanks to Web3 and the metaverse’s emphasis on interoperability.
The foundation of our new & developing immersive world will be blockchain technology. In contrast to clay pills or spreadsheets, blockchain generation offers the immutable, nearly real-time confirmation of possession of property or identification that is necessary to a functioning, boundless, but integrated metaverse. The beauty of the blockchain era is that you can do a transaction, and in ten minutes the entire network is up to date.
Both programmable money and the legal and illegal structures that define (or do not specify) the new standards of consumer protection may play a crucial role in the metaverse. The combination of currencies that foster agreement, recognition, and stability are crucial since the metaverse spans boundaries and engages in conventional financial activities outside of the digital world, including mortgages.
Although it is difficult to predict what the future of finance will look like, one thing is certain: it won’t be the same as it is now. Fintech and new technology, however, will compel us in one way or another to a new digital destiny. Fintech will help the new Michelangelos to prosper and the metaverse may be the hub of economic services.