The Banking Executive Magazine - June 2022 Issue

The Metaverse metaverse to the other. Users should be allowed and empowered to move more easily from the Meta metaverse to the Apple metaverse, and the Mi- crosoft metaverse in the future. Nick Clegg acknowledged that the World Economic Forum is playing an important catalytic role by bringing together academics, thinkers, regula- tors, online safety experts, people from Meta, counterparts from Google, Microsoft, and smaller com- panies too, to start having a conver- sation about the Metaverse, to lay the rules of who will govern the Meta- verse in the years to come. METAVERSE ROLE IN SOCIETY The World Economic Forum Annual Meeting Davos 2022 revealed that Metaverse has a potential to play a broader role in society through its ability to open our horizons, interact with those that we could not have met in the real world, experience new places, access public services and healthcare, and, overall, create an extension of the real world that we live in, to help us discover ways to make it better. According to Subha Tatavarti, the Chief Technology officer at Wipro Limited, the Metaverse offers a fun- damentally transformative model of engagement in virtual and aug- mented spaces, promising to change the way we interact with each other and the world around us. While the Metaverse offers many commercial opportunities, the broader benefits of the platform have yet to be fully uncovered. The meta- verse could be a force for good in areas like healthcare delivery, educa- tion, and training, but only if its risks are mitigated and it is regulated safely. The metaverse will make e-com- merce experiences more realistic and immersive. Metaverse will also transform educa- tion and training and make recruiting essentially location-agnostic. Metaverse will offer limitless possi- bilities to deliver healthcare effi- ciently, cheaply, and more widely, through telehealth, remote therapy, or remote treatments on the meta- verse. New travel experiences will be borne with increased adoption of the metaverse. Similarly, metaverse will level the playing field between urban and rural, developed and developing parts of the world by enabling access to public services in the remotest places. There is also a unique opportunity to tackle climate change with meta- verse. Through digital twins, meta- verse will allow for replication of buildings, cities, and even the earth to better understand the impact on the environment and help advance climate science. However, disadvantages and risks of the metaverse prevail, these include: • the risk of creating a platform ex- clusive to a certain part of the so- ciety, those who have access to technology and the skillset to use it. • over-dependency on and overuse of the metaverse can have signifi- cant societal implications, creating two parallel realities, leading to more division and resentment in- stead of more cohesion, inclusion, and collaboration. • 3D environments can collect a much broader range of data about individuals than the two-dimen- sional Internet. As an irreversible, traceable, and secure network of transactions, blockchains will be critical in managing identities, au- thentication, data ownership, and governance. • Organizations should ensure ethi- cal Artificial Intelligence AI stan- dards for the Metaverse. ROAD AHEAD FOR ARAB BANKS Realizing the full potential of the metaverse, Arab banks should ad- vance their technologies ranging from core infrastructure to experien- tial capabilities. Like the Internet’s globally accepted Domain Name System and Internet Protocol stan- dards, which catalysed user adop- tion, the metaverse will need similar standards for graphical, transac- tional, computing, and network capabilities. For an open, interoper- able, and secure metaverse, it will be vital for consortiums of different en- terprises, ranging from startups to In- ternet giants, to collaborate on protocol standards. Arab banks should also adopt new short and long terms strategies: Short-term (less than 12 months) strategy for banks: This can take multiple approaches. One is to focus on engaging cus- tomers in the existing open meta- verses. Banks can identify potential customers, onboard them through crypto wallets, and provide pay- ments, lending and custody services. Mid- to long-term (over 12 months) strategy for banks: Most global banks already offer digital assets, exchange, and custody platforms that can be extended to support the requirements of the virtual world. Banks can con- sider developing their own virtual world platforms (a private meta- verse), enabling new products and even marketplaces and tying them back to traditional infrastructure. Identity management in the meta- verse is another area where banks should focus. While it might be tempting to dismiss the metaverse, the opportunity cost might mean being rendered obsolete in a rapidly evolving market. Arab banks need to rationalize use cases aligned to their strategies across both short-term and long-term horizons. Given the speed of progress, dedi- cated efforts will be needed to ensure early identification and action. the BANKING EXECUTIVE 50 ISSUE 162 JUNE 2022