Already experienced in Know Your Customer processes, financial services institutions can tap opportunities to manage digital identities in the metaverse, but they must be prepared to manage potential risks that come with the adoption of emerging technology.
Banks and financial services institutions have opportunities to manage digital identities in the metaverse, potentially tapping modern cryptography to do so. They should, however, ensure they are prepared to manage the risks that come with adopting any new technology.
There had yet to emerge an effective way to implement general-purpose digital identity and without which, the metaverse could not function. This currently was the missing ingredient in the equation, said advisor on digital financial services David G.W. Birch, who was speaking at Huawei’s Intelligent Finance Summit 2022 held this week in Singapore.
Citing The Financial Times’ definition, Birch said the metaverse was a collection of shared virtual worlds in which people could navigate via their digital assets and digital identity–or” economic avatars”, as coined by virtual reality specialist Jaron Lanier.
While physical things could be repurposed–via tokens–and exist in virtual worlds, there needed to be an effective way to manage social identities and credentials.