Opportunities for Fintech in the Metaverse

Who has not heard of the?Metaverse?yet? Have you had a chat with a friend on Facebook on an Oculus? Have you heard of someone buying land in?Decentraland with MANA token ? If not, you would have used or seen someone playing online games wearing headsets. Well, all these and many more are instances of the?Metaverse.

There are abundant opportunities for the Fintech industry in this new yet not-so-new space. Companies are already embracing this concept, and the?metaverse market revenue worldwide is projected to rise exponentially. Beyond this, the Metaverse offers potential for practical and efficient applications in the?Fintech?arena.

This article delves into these various applications and choices for financial services, including the opportunities unlocked by the Metaverse. Finally, we look at how?Fintech?in the Metaverse is expected to shape and the many exciting ways the Metaverse offers to finance in the future.?

Let's get started with What is Metaverse?

Metaverse, though it seems like a neologism, has been in work for years. The impressive manner in which it makes the headlines these days gives it a punch. Thanks to companies like Facebook, Microsoft, and Nike, who added the ingredient of conviction to the metaverse recipe, for people to gain credibility in this abstract concept. In a way, Facebook endorsed the metaverse idea by rebranding itself to Meta.?

The Metaverse combines AR, VR, 3D graphics, cryptocurrency, NFTs, videos, gaming, and more. It sits on the foundation of Web 3.0 architecture, which bases itself on decentralized blockchains.?Metaverse?includes - World of Warcraft and Fortnite, Roblox and Player One, Decentraland, Sandbox, and much more. From buying real estate property to playing online games and purchasing in-game NFTs – all comprise the?Metaverse!

Benefits to Fintech in the Metaverse?

Metaverse?holds the immense potential to transform the fintech space. Here are a few ideas:

●???A novel approach to customer interactions- With its functionality of offering immersive experiences, fintech companies could interact with geographically-separated customers in a "real-like" virtual setting. Most companies are already using AR/VR technology devices to enable a life-like conversation with their distant customers. Metaverse blends the boundaries between the physical and virtual worlds.

●???Enhanced training- Metaverse helps to impart training services to clients and professionals in diverse areas of finance, including wealth creation and management, regulatory and compliance, etc.

●???A new gateway to business- In the metaverse world, digital identity and authentication providers will play an integral role. Financial companies operating in data management and infrastructure sectors will also be equally significant. Metaverse being blockchain-based implies that blockchain and digital asset companies are invariably critical. That said, the companies offering AI-powered services such as virtual assistants and chatbots will have a lot of work in the Fintech services.

Fintech as Seen Today in the Metaverse:

Fintech?in the Metaverse is not something new. There are already various fascinating applications of financial services in the Metaverse. First is the creation of native cryptocurrencies and coins. These crypto coins are the only effective ways to serve as a medium of exchange for trading virtual assets in the Metaverse. Moreover, cryptocurrencies and Metaverse have blockchains underpinning them, creating the symphony.?

Second, online marketplaces like Opensea, Rarible, etc., to trade non-fungible tokens (NFTs) and other digital assets offer the metaverse users a platform to buy and sell these assets. While the relationship between Metaverse and NFTs is still being explored, it appears that NFTs will act as the means to verify the authenticity of virtual assets; be it selling land or any digital asset in this mesmerizing virtual reality space.?

Finally, the essential applications of?Fintech?are the Decentralized Finance (DeFi) applications which constitute the backbone of financial ecosystems that hold the surplus transformative potential to completely transform the dynamics of upcoming finance in the metaverse era.

Future of Fintech in the Metaverse

Well,?Fintech?will undergo many one-of-its-kind experiences in the metaverse space. Let's explore a couple of them here. Similar to enterprises getting hosted on a Software-As-A-Service (SaaS) platform to use the cloud infrastructure, financial systems too would require a niche tenet, say Metaverse-As-A-Service (MaaS), to operate efficiently in this new domain. Though this idea is in the embryonic phase of its evolution, businesses are exploring it in their systems, like helping conventional brands to adopt immersive shopping experiences for their customers.?

That being said, the MaaS model, once fully functional, would start incorporating more activities and services, creating a need for native metaeconomies, resulting in Metaverse-native?Fintech?applications. Such Fintech?products would call for new infrastructure. For instance, today, metaeconomies like Roblox are using existing banking rails.?

However, as metaeconomies increase, the need for new banking rails would arise. This segment's surplus potential would have to be exploited to meet the emerging needs of fintech in the metaverse arena. And this takes us back to where we discussed the current applications of fintech - the DeFi services.

Closing thoughts

Metaverse, though, in its infancy, offers tremendous scope to transform the?Fintech industry. Enterprises are already exploring various options; for the future to speak, what works and what doesn't.