A session on the potential of the metaverse in the global asset and wealth management industry closed out Nicsa’s Strategic Leadership Forum in March — proving that science fiction is inching its way much closer to fact.
John W. Stadtler, Partner, Financial Services Industry, PwC, moderated the panel, which focused on how the metaverse will shape products, services, and relationships moving forward. The conversation started with what remains a pressing question for many pondering the metaverse: What, exactly, is it?
“Metaverse is part of what we call Web3, which is the third iteration of the internet and web,” said Grady Hua, Director at PwC. “Web1 is the websites we read, Web2 allows us to ‘write’ on the internet — think blogs or YouTube, which are owned by central entities. Web3 allows us to have ownership of our digital identity or data sources.”
Examples include popular gaming platforms like Roblox and Fortnite, as well as the immersive Decentraland, a decentralized virtual-reality platform powered by blockchain and featuring smart contracts that establish digital terms of agreement.
To understand the metaverse in context, Hua said to picture Web3 in three layers. The first is the metaverse, a visual layer where users interact with objects and participants in 3D environments. Underneath the metaverse lies a blockchain-based system encompassing data and digital identity. The third layer, cryptocurrency, allows for ownership through an economy of transactions.
“Several flavors of cryptocurrency and digital assets currently exist; it’s still too early to determine which will prevail in this space,” Ryan Rugg, Head of Digital Assets TTS at Citi, said. “But we’ve seen it scale — at its peak, the global cryptocurrency market was in the trillions.”
Metaverse use cases include online gaming, virtual spaces for work and learning, enhanced social media interactions, and virtual reality training, among others. Hua said metaverse training could go beyond teaching a worker to complete a physical task.
“A lot of the diversity training that’s happening today is through 2D content on a screen; you passively experience a third-person point of view,” he said. “But if you put on a virtual reality headset, you would literally see obstacles and challenges from another person’s perspective and consider how you would feel when placed in those situations.”
The metaverse and its use cases are still emerging, partly due to evolving tokenized economies — markets where digital tokens represent assets. From an adoption standpoint, the financial services industry is in an experimental phase (not yet implementing, scaling, and solutioning). But, “we’re seeing a ton of industries recognize that future generations are going to want to experience things differently,” Rugg said.
Nicsa members concluded the SLF 2023 with a buzz: excitement and wonder about the possibilities of technological evolution, and confidence that the future of asset and wealth management has endless opportunity.
For a full replay of this session, registered members can visit Nicsa’s 2023 Strategic Leadership Forum website.
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