CFOs and the Metaverse: What role should they play?

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The Internet of Things (IoT), from the physical to the virtual, captures huge volumes of data. The way that assets and people interact with the world can provide an overwhelming amount of information for decision making. But what are the practical and ethical considerations for a CFO who wants to add value to the business?

While engaging customers has been part of commercial success throughout our history, the move online has offered entirely new ways of interacting, from the first websites and e-commerce to the current position on the cusp of an immersive world. As the technology develops, the data that can be exposed grows exponentially. Dealing with these riches in an ethical, responsible and strategic way requires a partnership between developers and decision makers, innovators and CFOs.

One company that is deep in the Internet of (Virtual) Things is Threedium , and CEO Mike Charalambous tells us more about their work and the challenges and opportunities of the connected world.

The supply chain of the Metaverse

“We started the company with the mission of making 3D and AR [Augmented Reality] products affordable, accessible and super easy,” says Mike. Threedium supports a host of large enterprises such as Sainsburys, Douglas, Johnson & Johnson, Farfetch, LVMH and Mercedes, and also works with ecommerce providers to enable retailers of any size to create immersive experiences for their customers.

“We've been dealing with 3D and AR since 2017,” says Mike. “We've seen the whole evolution of the space, and we reached the point where we could predict what was going to happen. We started investing in R&D and we were talking about the metaverse world almost two years ago. We are building the supply chain of the metaverse. So what China is to the physical world, we want to be for digital goods.”

Threedium already enables brands and agencies and SMEs to transform product images into immersive assets. The new Metacommerce engine will allow brands to authenticate these virtual products, these digital twins, using blockchain as the tool for certification and as a single source of truth for authenticity.

“Anything published from a brand’s digital assets will have a certification that shows on the blockchain that this was actually created by them,” says Mike. “You can always trace back and see that it has provenance and it's not someone random person or company trying to generate a 3D asset and sell it to you. This enables us to distribute those immersive assets across ecommerce, in banner ads and other advertising, and also to sell them within the metaverse.”

If this is becoming too grounded in science fiction, fear not. “Brands can also attach physical fulfillment to those digital assets,” says Mike. “Once a customer goes into Decentraland [a 3D virtual browser-based world] to, let's say, purchase a hoodie for their avatar, they can have the ability to convert and receive the actual physical garment in their home. We're looking to bridge the gap between direct-to-avatar and direct-to-consumer.”

This flips the regular concept of supply chains on its head for the metaverse, delivering a physical twin of a digital asset. More importantly, it allows brands to experiment with full interoperability of their assets. “Brands are using us for their entire end to end digital transformation strategy when it comes to commerce,” says Mike.

The ethics of infinite data

With this reach, the data that can be collected becomes vast, and ethical considerations come into play. It is no longer a question of if you can collect data, but if you should. The data points are there, but Threedium is extremely cautious about activating collection for the sake of it.

“Having digital assets allows us to expose a lot of data in terms of user behaviour,” says Mike. “How users behave when they see a digital asset within an e-commerce placeholder. How they behave when they scan a QR code to see in augmented reality in the real world. What they do when they purchase a 3d garment and place it onto their avatar.”

The scale of data collection that is made possible by the Internet of (Virtual) Things is staggering. In the current e-commerce and browser-based world, there is already overwhelming potential to gather insights.

“One picture equals a thousand words,” says Mike. “One 3D asset equals a thousand data points. What we are able to infer is infinite. We understand how much time a user spends swirling or flipping the product or zooming in to specific areas to examine textures and details, and the angles that are viewed by the majority of users while they are interacting with the product. We know at which point they exit from the interaction. We see the most preferred configurations and if when they configured a specific colour or texture, they converted or dropped. You can also connect Google Analytics to understand the demographics of the people that interacted and the devices that they've used.”

The CFOs role in responsible data collection

The Internet of Things may expose these data points, but any move to actually collect the data must take account of ethical, social and privacy considerations, assess the relative risks to the brand, and ensure that the datasets are relevant to strategic decision making. This is an aspect that should be driven by the companies themselves, and by the tech-savvy CFO who understands the value of the right data.?

“We can enable brands to collect all this stuff, and we don't want to,” says Mike. “We would love to work with people and set some sort of precedent about this kind of data and how they can be helpful and useful.”

The onus is firmly on the users of data to reflect on what they really need. Threedium enables access to data extraction for only a handful of their clients who have requested specific decision-making data. “They know exactly what they want to do,” says Mike. “They depend on data for their strategy and their user experiences. Most of the brands we work with are not even asking about it, so we're not encouraging them because we're not sure if they're going to be using it right.”

Preparing for a virtual future

The need for CFO involvement in responsible data collection is urgent. The concept of the metaverse and the tools needed to realise it are developing rapidly. What is Mike’s vision for the next few years?

“This is still science fiction stuff,” he says, “but it's going to come, whether by the end of the year or early 2023. We’ve already moved our headquarters into Decentraland. We’re a fully metaverse company.

“We will be able to determine avatar behaviours. Once they use the garments and they wear them on the avatars, brands will be able to pay the avatars that choose to wear their garments for X amount of time, or based on how many other avatars have crossed paths with them and viewed the garment that that specific Avatar was wearing.

“We will also be able to predict, understand and create metrics such as wear to earn based on the amount of time and the amount of activities that a person does within the metaverse. The brand can pay them based on how many kilometres they've run or what kind of activities they participated within the metaverse, using or wearing their brand. All of a sudden you're not just an Instagram influencer or an ambassador.

“Avatar behaviour then means you're able to understand trends, and where you can promote, advertise or even use those trends to develop strategic plans within the metaverse as a brand.”

There are so many possibilities emerging, but with great power comes ethical responsibility. CFOs are perfectly placed to guide their peers and ensure that when faced with the smorgasbord of data from the metaverse, we choose wisely.

If you would like to get involved with setting standards for data extraction, you can contact Mike through LinkedIn or at threedium.co.uk .

As a finance and accounting professional what's your take on IoT, the Metaverse, and all the new possibilities we're seeing coming our way right now?

This was the seventh article in my latest series "Frontier Technologies for Finance". You can read the previous ones below. Remember to click subscribe to be notified about future articles.

How are frontier technologies impacting the world of Finance?

Why CFOs are well-placed to understand Blockchain and Distributed Ledgers

It's time for CFOs to get a grip on cryptoassets

CFO, here are your blockchain use cases

How blockchain is shaking up your financial statement

What CFOs need to know about the Internet of Things

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Anders Liu-Lindberg ?is the co-founder and a partner at the?Business Partnering Institute ?and owner of the largest?group dedicated to Finance Business Partnering ?on LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company?Maersk . I am the co-author of the book “Create Value as a Finance Business Partner ” and a?long-time Finance Blogger ?on LinkedIn with 67.500+ followers and 150.000+ subscribers to my blog. I am also an advisory board member at?Born Capital ?where I help identify and grow the next big thing in #CFOTech.