Metaverse in FinTech

25th July 2022 | Blogs, News

What is Metaverse?

Metaverse is a simulated three-dimensional space where people can connect online, interact within a digital community. Suers can invest in digital assets and trade in a virtual marketplace.

The Internet has evolved to a 'Web3' version embedding augmented reality (AR), virtual reality (VR), social media and digital payment infrastructure. ​​Extended reality (XR), the superset of AR and VR, is also used to create fully immersive experiences.

Key Characteristics

According to law firm Norton Rose Fulbright, the key characteristics of Metaverse are:

  • Persistence
  • Synchronicity
  • Availability
  • Economy: non-fungible tokens, cryptocurrency, e-money, and fiat currency depending on DLT
  • Interoperability

Additionally, Visa has categorised Metaverse into 4 main types of Augmented Reality, Lifelogging, Mirror Worlds and Virtual Worlds based on the dimensions of simulation vs augmentation and world focused vs identity focused.

Source: Visa

According to Blockchain Council, the main difference between Metaverse and Web 3 is that the former focuses on 3D interfaces and interaction which support creator economy, while the latter is based on decentralisation and governance by peer-to-peer network including cryptocurrencies. Metaverse platforms can be both centralised (governed by a single entity) or decentralised (open-sourced).

Additionally, Web 3.0 is offering integration with new and existing payment methods like “pay-per-use” content monetization driven by micropayments, enables new products and services, creates a completely new customer segment and a new digital customer acquisition and a new brand experience with personalised offers based on data.

Source: Blockchain Council

The Ecosystem

Despite its early stage of development, Metaverse usage has been steadily increasing. Generation Z users actively engage with its gamification element, while financial firms enter this new territory to increase commercial awareness, improve customer experience with virtual branches and AI assistants, and indirectly increase customer engagement in their physical branches. 

Fashion brands, sports clubs and content creators organise events and promotional campaigns to expand their customer base and monetise intangible products from their target audiences such as collectibles and subscription services.


Source: Credit Suisse

As for FinTech activities in the Metaverse, there are a few benefits from using blockchain technology, especially supporting “direct-to-avatar” (D2A) sales. Most currencies used in the Metaverse are blockchain-based. 


Both businesses and consumers can benefit from being active on the Metaverse.

On one hand, businesses can:

  • Improve customer engagement
  • lower costs and and make settlement for payment faster
  • process tokenization for fundraising
  • train employees and create a virtual workplace

On the other hand, consumers can:

  • use a digital identity enabling payments for online products and services
  • do 3D learning, training and progress their education 
  • increase opportunities for fractional trading
  • reduce their waiting time for finance applications

Source: Citi

Use Cases

Here are a few examples of the FinTech use cases in the Metaverse Ecosystem (on Web 2.0).

  • Bank of America offering its employees VR training
  • South Korea’s KB Kookmin Bank developed virtual “financial towns,” telecommuting centres and interaction spaces
  • NH Investment & Securities developed virtual investment advisory services


Source: CB insights


Source: Credit Suisse


Recent Developments

After Meta - formerly Facebook - announced its experiment on Metaverse, in the last two years many other firms announced their expansion in the Metaverse, mainly through funding and acquisitions, or even by developing their own Metaverses.

Here are some interesting data on such involvement of big tech and financial services in the Metaverse:

  • Meta: annual investment of €8.8 billion in the metaverse
  • Microsoft: bought Activision Blizzard for nearly €61.6 billion and developing apps on the Mesh platform
  • Google: building VR/AR products such as headset
  • Apple: building VR/AR products, Head-Mounted System (HMD), virtual meeting app
  • Amazon: developing cloud-based services in the gaming technology
  • Mastercard: soon to launch biometric payment method ‘smile to pay’ as part of metaverse plans
  • JP Morgan Chase: experimenting in Decentraland
  • HSBC: purchased virtual land in the Sandbox
  • Standard Chartered: its subsidiary in Hong Kong has partnered with the Sandbox and acquire virtual land in Mega City
  • eToro: launched MetaverseLife offering a smart portfolio with exposure in enabling platforms


According to Statista, it is estimated that 30% of businesses worldwide will have products and services ready for the Metaverse by 2026. 

McKinsey reported substantial value of Metaverse-related investments as of May 2022 of more than $100 billion, calculated from top 30 companies that publicly announced. 

Furthermore, JP Morgan estimated that the total market for firms in the Metaverse will reach over $1 trillion in yearly revenue, while Citibank forecasted the total addressable market for the Metaverse to be between $8 trillion and $13 trillion, with five billion users by 2030.


Source: Statista


Source: McKinsey


The implementation of Metaverse must take into consideration relevant laws and regulations because there are many policy or legal implications on the borderless virtual environment that touch upon:

  • Data privacy: beach of personal data such as processing or sharing with 3rd parties
  • Competition and antitrust: monopoly from digital market
  • Cybersecurity: increased occurrence of cyberattacks
  • Money laundering: using coins to avoid AML/CFT laws
  • Identity authentication and ownership: acceptance of transfer of legal rights
  • Intellectual properties: infringement of trademark or copyrights
  • Liability and trans-national supervisory authority such as DAO (Decentralised Autonomous Organisation): duties and responsibilities to maintain peace
  • Accessibility and inclusiveness: digital exclusion for certain group of people
  • Misinformation, frauds, and harmful content: scam, discrimination, and harassment 

In conclusion, it is still too early to determine whether the physical world can fully integrate into a virtual universe as there are some issues regarding interoperability and decentralisation to enable a fully digital economy. In the UK, there is still work to be done to keep up with the global Metaverse in FinTech. However, Metaverse is undoubtedly gaining adoption and is gradually transforming financial services.

Author: Pavadee Burapapong, MBA candidate at Manchester Business School


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