Updated: Jul 5
A force for good or a stumble in the dark?
The Metaverse, I’ve heard of that. So, what the heck is it? I often get asked this question.
Working with firms building or entering the sector has helped me start to find answers. Also, see some of the major pitfalls ahead.
This article is the first in a series exploring Metaverse opportunities, challenges and how to successfully navigate them.
What the heck is it?
The Metaverse is like the internet in 3D, with technology, human behaviour and social interaction fusing together at a deeper level. Also, it brings together artificial intelligence, augmented reality, and virtual reality.
However, it does this in far more engaging ways than today’s internet. It is not a strange and distant concept. It’s with us right now and growing fast. The Metaverse is creating digital worlds that sit alongside the physical world.
Also, it will not replace it entirely; boundaries will become blurred. The Metaverse could be a leap forward or a stumble into the unknown for individuals and firms.
Three reasons the Metaverse can be a force for good
The Metaverse could be a giant leap forward. Although significant concerns
need to be addressed. The pros and cons are equally balanced and dependant on
an individual’s perspective.
Highlighted below are three key applications where the Metaverse can
supply positive change to how we work, heal, and use financial services.
Reason One: The working environment
People often think of the Metaverse as just a gaming and social experience. However, as its influence grows across workplaces, the way people work will radically change. It could be the next step along the evolutionary road of remote working. For example, imagine being able to attend your firm’s head office today to deliver a presentation and catch up with colleagues in social areas before and after the meeting. All this will be done while sitting in your garden or home office.
The Metaverse and remote working were made for each other, and the time and cost benefits for individuals and companies will be immense. Also, conferences are highly likely to be held in the Metaverse, with costly physical locations giving way to virtual environments and fantastic opportunities to network in a virtual face-to-face way without leaving the house.
Reason Two: Medicine and wellness
Secondly, the Metaverse will change the way we approach medicine and treatments. Currently, surgeons use technologies such as AR, VR, AI, and minimally invasive surgeries to augment patient outcomes.
Leading hospitals and universities are already using these technologies for surgeries because this gives a 3-D view of a patient’s body and helps to interpret surgeries, plan, and perform them. In addition, companies working in the virtual reality space are devising mental wellness applications as this technology holds enormous benefits for treating emotional and mental wellbeing.
Reason Three: Financial services
Thirdly, financial services in the Metaverse will rapidly evolve. Forbes predicts that by 2026, 25% of people will spend at least one hour a day in the Metaverse for work, shopping, education, social and/or entertainment.
An economic system that uses NFTs and Crypto options will take centre stage to unlock value exchange in the Metaverse. As more people use the Metaverse to play, work and treat illness, the demand for trusted financial services options and methods will increase. Many financial services firms are just beginning to explore how to do this. For example, China’s Tencent recently announced the official formation of an “extended reality” unit. In addition, Accenture has also launched a Metaverse design and consulting practice.
Finally, many firms building the Metaverse are working out how best to partner and navigate with financial services providers in the new and emerging space.
Three challenges ahead that are not insignificant or easy to overcome
There are several sizeable challenges that the Metaverse presents to individuals and firms.
Highlighted below are three challenges the Metaverse needs to overcome regarding how we work, heal, and use financial services.
Challenge One: Environmental impacts
The changes in how people move around could significantly reduce the amount of travel for work and fun. However, there could be a corresponding spike upwards in greenhouse gases. This is because virtual reality technology and data centres use artificial intelligence and cloud services, which can require lots of energy.
Also, the continual need to develop improved VR capability could encourage people to constantly upgrade hardware and dispose of outdated equipment via landfill sites. The positive impact of the Metaverse on the environment could quickly be overwhelmed by these negative aspects.
Challenge Two: Privacy and vulnerability
Privacy and protection issues are foggy for individuals and firms alike. The Metaverse will collect personal data, behavioural information, and references. How this data is protected and used will be critical to how people trust and interact with the Metaverse.
Hacking individual identities and using them is also an issue. Whilst privacy is a concern, the risk posed to vulnerable people and children presents challenges that must be overcome.
For example, many parents find it difficult to keep track or control what their children are doing in the physical world of gaming. The risks increase in a more fluid Metaverse world where interactions are blurred and often disconnected from parents.
Challenge Three: Banking, payments and AML regulations
How financial services work in the Metaverse could prove challenging. The first obstacle for individuals and firms to overcome is how to make payments in ways that are trusted and secure. Decentralised finance and blockchain technology supply possibilities.
However, these can be complex, poorly understood and open the risk of consumer harm if not considered. Also, traditional banking providers often don’t understand firms building the Metaverse. This makes it difficult for them to set up financially and move the Metaverse forward. In addition, the lack of AML checks in the Metaverse may open new possibilities for money launderers and criminals. Finally, the growth of new virtual asset classes and gaps in regulation could also pose problems and open significant financial risks.
The next article in this series will start to explore some emerging solutions that help embrace the potential of the Metaverse and tackle risks.
Contact us today to learn more about Web 3 and the Metaverse and the solutions we supply to firms who are building or entering these spaces for the first time.