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제목 The Rise of the Metaverse and its Impacts on the Economy and Financial Industry

The metaverse is coming, and it is going to be the next big thing. Metaverse - a combination of meta (beyond) and universe - literally means “beyond universe” and is typically defined as a collective virtual shared space. It combines virtual worlds, augmented reality, and the internet, and creates a world where physical reality is merged with the digital universe.

 

The metaverse is classified into four types as below:

Type

Description

Augmented Reality (AR)

Modification of a real-world environment by the addition of visual elements, sound, or other sensory stimuli in a way that enhances one’s experience

Lifelogging

Recording one’s daily life in a varying amount of detail with electronic devices such as wearables

Mirror Worlds

Representation of the real world in a digital reality to accurately duplicate the physical world  

Virtual Reality (VR)

Computer-generated artificial environment with three-dimensional scenes and objects that appear to be real, making the user feel they are immersed in their surroundings

 

Two major drivers behind the emergence of the metaverse are the fourth industrial revolution and the COVID-19 pandemic. Building on the third digital revolution, the fourth industrial revolution is now underway, bringing about fundamental changes to the way the economy works and the way people live, work and socialize. These changes are being fueled by technology breakthroughs in areas such as robotics, autonomous vehicles, artificial intelligence, and the Internet of Things. All these technologies are facilitating the development of core infrastructure of the metaverse.

The outbreaks of COVID-19 has been speeding up the creation and widespread use of a virtual shared space, accelerating the path to the metaverse. The pandemic has left people spending time indoors, working and studying from home, and networking with each other online, all of which are becoming a new normal. Contactless interactions have become more common than traditional face-to-face interactions in the new normal, drawing a great deal of attention to metaverse technologies. Indeed, after the onset of the pandemic, the average daily usage of virtual reality devices in Korea increased by 37.9% compared to the pre-pandemic level according to a survey by the Korea Creative Content Agency.

A wide range of companies in various industries are setting their eyes on the emerging metaverse trend. The rise of the metaverse is projected to boost GDP globally by up to USD 1.5 trillion in 2030 from USD 46.4 billion in 2019 according to PwC, a global consulting firm.

 

(Source: PwC)

This means that the metaverse may bring huge growth opportunities to businesses in terms of product and service development, marketing, and business process improvement. In response, the Korean government initiated an industry alliance in May 2021 to undertake joint metaverse projects and promote the development of metaverse technologies and ecosystems. The alliance consists of 17 companies including a major auto manufacturer and wireless carriers, and eight industry groups including the Korea Mobile Internet Business Association.  

Against this backdrop, the financial services industry is also intent on embracing the metaverse to attract young tech-savvy customers and create immersive and more personalized customer experiences. The metaverse may allow financial companies to provide seamless banking solutions by achieving greater alignment between online and offline services. For example, services that are usually offered offline such as customer consulting and due diligence for real estate investments can be moved online to the metaverse according to a report by a research arm of Hana Bank.

Likewise, financial companies in Korea are seeking ways to take advantage of the metaverse in the areas of product advertising, customer service, and employee training. Hana Bank, a local commercial bank in Korea, built a virtual training center where newly hired employees are to be trained. Standard Chartered Bank Korea is having a seminar on wealth management in a virtual setting where avatars would welcome participating customers. Many financial groups are also planning to open virtual branches dedicated to offering digital services to customers. 

The value and business benefits that the metaverse can deliver are increasingly more enticing, and technological advances are opening the way for metaverse-driven innovation in the financial industry. In particular, financial firms are likely to make the most of the metaverse to provider better customer services. Improving the customer journey and providing a positive customer experience is one of the most important goals for financial companies, and the metaverse may be a powerful tool to achieve that goal.

 
 
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