The metaverse as a transformation point for financial institutions

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The Metaverse, a virtual world that is becoming a reality

Over the last two decades, the technology industry has considered the development of platforms that connect online and offline environments as one of its main strategic focuses. Social networks, marketplaces and digital experiences have revolutionised the way in which many people interact and consume. However, the main transformations linked to the convergence between the real and the virtual are expected to revolutionise the world of technology in the coming years, with the development and expansion of the metaverse.

Since 2021, the debate about the metaverse has spread and there is an increasing how to get telegram profile link number of people interested in the topic. The main idea is that a network of online environments is capable of replicating the real world, using technologies such as the internet, virtual reality and augmented reality. In this way, who we are in the digital universe would be an extension of who we are in the offline environment.


Analyzing the possibilities of the metaverse

We must take into account some changes that the payments industry will undergo. For example, for financial institutions, the metaverse represents a strategic turning point and will be responsible for accelerating some trends such as the development of sales and marketing solutions and services, risk management strategies, and the popularization of digital assets.

A specific case is the demographic growth of millennials (people born between 1980 and 1994) and members of Generation Z (born between 1995 and 2010), so the challenge for financial companies is to develop their portfolios aimed at these audiences and incorporate digital payment solutions that correspond to the expectations of digital natives.

We can see that some financial institutions have already started to build branches in the metaverse. In addition to projecting the metaverse as a new delivery channel, organizations must understand virtual universes as relevant sources of data. Since digital wallets have been a focal point in the negotiation of virtual assets and have the ability to become a form of digital identity, companies have as one of their strategic objectives to envision the construction of a consolidated portfolio in online wallets and look for opportunities.

Alternative credit scoring models are also being developed to fill a gap in traditional models, which used to focus primarily on financial data. For example, there are now algorithm-based frameworks for using other types of data to provide a broader view of a consumer's trustworthiness and financial behavior.

In the current model, some financial institutions do not have access to the full journey of consumers. By transferring customer spending from current online platforms to new formats in the metaverse, organizations will have new opportunities to personalize and develop products.

In this context, there are fintechs from different regions of the world that are working on alternative credit scoring models to succeed in this segment of the industry, and thus be able to generate new opportunities for collaboration with technological and financial partners. For example, in the United States, there is already a credit card focused on the young public, in which a proprietary algorithm allows consumers to build a credit history based on this solution.

Another key aspect for financial institutions to succeed in the metaverse is investing in marketing and creating partnerships. Collaborating with gaming, entertainment and sports companies can be an effective way to capture the attention and engagement of millennials and Gen Z, as consumers in these sectors generally have a high rate of loyalty.

With this new structure, companies in the financial sector must define strategies and priorities to take advantage of the opportunities offered by this new digital revolution. This is a moment similar to that seen two decades ago, when online marketplaces revolutionized the way consumers shop. And one thing is clear: the metaverse will change the rules of the game as we evolve from the Internet of Information to the Internet of Value.