FinTech or fintech stands for Financial Technology, and fintech firms specialize in technology growth to support the banking and financial industries. The past year has transformed social media along with social behaviours.
It has impacted human life as we know it and has changed it significantly leaving a mark on different areas of our lives and its impact continues to generate transformation around the world. We all have mobile banking on our phones, which helps us to do all our banking transactions at our fingertips from the comfort of our homes or any place. There are financial applications used to calculate EMIs and insurance premium quotes as well.
There are some challenges and problems concerning Metaverse:
- Standard
- The impact on the community is being an island.
- Identity
- It has become a big issue. The ecosystem is not well developed yet.
- Privacy and security concerns
- Need of enabling set of regulations.
- Need for 5G and Web 3
- 5G has just started and true decentralized web 3 is a few years to be released.
- Need secure payments
In metaverse, Central Bank Digital Currency (CBDC) type digital currency is having good scope.
The increasing awareness of metaverse’s potential has grown among metaverse and financial services firms. Many companies are eager to point out the contrasts between online gaming worlds and the metaverse, Microsoft’s $68 billion acquisition of game business Activision earlier this month was a big shot across the bow for those who dispute the metaverse’s high priority among computer corporations.
Fintech companies are financial institutions that provide financial services and products by using technologies to augment, streamline or digitize their offering. The financial technology ecosystem today is seeing several high-growth fintech startups with new business models in various sectors like lending and credit, payments, cryptocurrencies, wealth tech, challenger banks, regtech, blockchain, open banking, BNPL, insuretech and more that are challenging traditional banks.
The future of Fintech in Metaverse:
- Virtual Interaction
The most likely way for financial services organizations to engage with the metaverse will be through consumers.
- Virtual Training
This type of metaverse deployment can be utilized as a training environment for financial services personnel in addition to providing customer-facing capabilities.
- Virtual Business
Financial data management companies and financial infrastructure companies whose job it will be to help facilitate value exchange in the virtual environment, as well as digital identity and authentication providers to say nothing of innovators like Soul Machines will all play a significant role in such a world.
San Francisco-based stock trading app Robinhood recently filed for IPO and demand for shares has some believing the company’s valuation could approach $40 billion. But banks aren’t the only financial institutions that have made tech-driven changes. Entire markets — from digital loans and mobile stock services to e-commerce payment platforms and digital currency exchanges — are rooted in digital financial access.
JP Morgan was the first bank to enter the metaverse with much fanfare this year. The US investment giant took a large plot in Decentraland and boasts a prowling tiger as a feature in its Onyx Lounge.
Establishing a branch in the Sandbox region of the metaverse, HSBC opened it, while UK-based payments fintech Sokin recently announced its imminent foray into the augmented reality platform.
“Sokin’s metaverse world will host different brands and businesses for visitors to access, for example, a football club, entertainment or fashion brand”, Vroon Modgill, founder and CEO at Sokin, who already partners with several global football clubs, explains.
Other industry voices point to four main aspects that attract banks and fintech to the metaverse. They are:
- Early-stage Opportunism
- Branding opportunities
- A new dimension to customer servicing
- A haven for digital currencies
Some Top Fintech Companies are Clyde, Digit, Flywire, IHS Markit Digital, MANTL, Remitly, Riskified, Spring Labs, Robinhood, Chime, Affirm, Tala, JPMorgan Chase, Pitchbook, Avant, Braintree, Morningstar, Acorns, Gravity Payments, Brex, Varo Money, Blend and TrueAccord.
AR, VR, AI, IoT and blockchain are advancing fast. Similarly, their penetration into our daily lives, too, is increasing rapidly. They are being used across healthcare, manufacturing, fintech, hospitality, customer service, and many more industries. These technologies can significantly enhance the services offered in these various sectors.
For example, the future of fintech can be transformed completely by using VR for conducting virtual meetings with financial institutions and enabling customers to pay for products virtually, forgoing the need to step out of their homes.
One application of these technologies that has everyone excited is the metaverse. The intersection gives birth to an interactive, immersive, and collaborative shared virtual 3D environment. In addition to these, the metaverse is based on AI, ML, IoT, and blockchain technologies. Metaverse is not a new concept. The word ‘metaverse’ can be traced back to 1992. Its implementation and popularity have only risen in recent years.
Tech giants like Microsoft, Google, Meta (formerly Facebook), Nvidia, and Unity Software have already made huge investments in the metaverse projects. They are betting on it to become the next big thing!
