EY Abstract Digital Futuristic Eye

The Metaverse: Commerce in three dimensions

We'll examine how the metaverse will create avenues for connecting with new and existing financial services customers.

In brief

  • The metaverse is a journey whose destination is unclear, but the imperative to act is urgent.
  • Digital assets will underpin user-driven economies in the metaverse.
  • Opportunities to leverage immersive three-dimensional experiences will exist without a dependency on Web 3.0.

In a series of points of view from EY Financial Services Organization (FSO) Consulting, we explore the impact of the metaverse and digital assets on the financial services industry. We’ll assess the impact of digital assets and how clients will seek the assistance of both traditional and crypto-native financial firms to harness these assets to create value and wealth. And we’ll connect the dots at the intersection of Web 3.0 and the metaverse. This first point of view serves as an introduction to the series.

Future articles in this series will include perspectives on the EY eight-dimension model of the metaverse, the disruption and opportunities created in the evolution of Web 3.0, and what financial life in the metaverse will look like, as well as a deep dive into specific opportunities and use cases in the financial services industry. 

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    Commerce in three dimensions


    Advances in immersive, three-dimensional experiences, expanded applications of gaming technology and the emerging foundations of a decentralized internet are coalescing to give rise to the metaverse. Communities, some empowered by blockchain, are embracing new rules of digital scarcity and digital asset ownership, defining new experiences and creating new business models, which may fundamentally disrupt the aggregated dominance of a few large internet platforms in the long run.


    Some call this “evolution.” Some call this “revolution.” In a way, both are right. Whether the metaverse becomes the foundation of the new internet or simply another way to interact with content and engage with customers, the potential use cases, especially when combined with Web 3.0 technologies, have the capacity to change the way business value is created, stored and exchanged, therefore impacting the landscape of finance. Revolution or evolution, it will require firms to rethink their place in the financial services ecosystem. Will you be disrupted, or will you be the disrupter? Can you build the partnerships necessary to take advantage of new opportunities?


    This transformation is happening now in a very public way. Much like the evolution of the internet, which accelerated in the 1990s, the metaverse end state is only a vision — a vision, however, that demands the attention of the C-suite because of the impact that many are predicting. Various leaders in the financial services community believe that this opportunity could be measured in trillions of dollars.

    • Annually, $54b is spent on virtual goods (twice what is spent on streaming music).
    • The average price of a parcel of virtual land in four pioneer metaverse experiences doubled in 2021.
    • More than 200 strategic partnerships have been struck in the metaverse platform The Sandbox.
    Sources: EY study, Republic Realm, Ledger Insights.

    A common understanding of the metaverse is elusive, but it might go something like this: a highly immersive, persistent, three-dimensional experience where participants interact with each other, objects and their environments, with the ability for participants to own digital assets, such as cryptocurrency and virtual land. Metaverse dwellers establish and participate in user-driven economies, and conduct transactions between peers and brands across environments, without dependencies on intermediaries or the developer of the environment in which they are present.


    Can the metaverse exist without Web 3.0?


    The metaverse and Web 3.0 are often mentioned in the same sentence, sometimes interchangeably. Many are asking, “What’s the difference between Web 3.0 and the metaverse? Are they the same thing? Is one reliant on the other? Can there be a metaverse without Web 3.0?”


    What these questions elicit and draw attention to is the gap between what the metaverse is today and what it could be in the future. We live our real lives in three physical dimensions, even when we have our heads buried in our laptops or phones. While we adapted to more of a digital life organically (and forcibly, to deal with a global pandemic), we have also grown a deeper appreciation for in-person human interaction and the joy of physical connection to space.


    But we launched this new digital work-life experiment predominantly in two dimensions. Even with the existence of early metaverse gaming experiences, the technologies we adapted to work and socialize from afar were neither rich nor immersive. The technology and behavior were not quite there, so we defaulted to our two-dimensional paradigm and widely adopted new meeting and collaboration models, and the beloved video call cocktail hour — all of which engendered fatigue and diminished personal connection while arguably maintaining, and in some cases increasing, productivity.


    The immersive third dimension of the digital experience is what will define the metaverse in the short term. Whether this third dimension comes to life through augmented reality/virtual reality (AR/VR) devices or in rich worlds modeled by rendering engines, our avatars will explore new ways to interact, and we will feel more “present” in the digital realm. While the nexus between blockchain and the metaverse matures in the form of user-driven economies and ownership of digital assets, we are at the point on the continuum where, for the majority, the metaverse exists predominantly as a presentation layer to the current internet and its content.


    In the now, what we see are immersive experiences that enable teams to be more productive in virtual workspaces. We see innovative ways to onboard and train employees at scale and at speed in a consistent fashion, for small and large global organizations alike. Better tools will emerge to visualize accident scenes and train insurance adjusters in augmented reality. We’ll attend various conferences in virtual spaces and form new online communities. And these new experiences and interaction models will lay the groundwork for the ultimate vision of the metaverse, with or without the full integration of blockchain technology or digital assets.


    For financial services firms, there is an opportunity to harness immersive experiences to interact in new ways with customers. There’s also an opportunity to provide new products and services that build bridges between the metaverse and the real world. Immersive experiences in the metaverse will augment, not replace, firms’ digital presences, especially for the recent Gen Z and Alpha generations. They’ll replace some events and provide opportunities for financial services firms to deliver value to customers in the form of financial literacy training or financial planning.


    In the medium term, the opportunities that the metaverse presents are compelling for firms in the financial services industry. The nature of e-commerce will be different, and we’ll enter an age of digital ownership where we are not just consumers but also owners in shared experiences that are open and available to all. This will segue into clients expecting financial services firms to guide their activities in this new digital economy, such as creating, buying, selling and managing digital assets. This new paradigm introduces a number of considerations, including inclusivity and accessibility, and we must be mindful of the impact on a widening digital and wealth divide. 

    The metaverse will be a journey

    A virtual representation of one of the most ubiquitous tools we have in the real world — our wallets — will enable our metaverse experience. In the metaverse, our ability to hold digital assets and transact with each other will be tied to a digital wallet and digital identity. This secure identity will allow us to conduct peer-to-peer business with other individuals and entities in the metaverse. Innovation in digital wallets will create disruptive leaders and make the metaverse more accessible to consumers.

    But the journey to the metaverse will be different for each person and each company. There will be pioneers; many of them are already building the infrastructure and experiences as the foundation. Others will follow, compelled by the promise of new opportunity.

    “The metaverse is a journey, but the foundations are here today. Multiple dimensions of technology, commerce, risk and community will evolve to form what the metaverse will be. Each dimension will mature over time, presenting new opportunities and challenges. The time to act is now to begin building your strategy and ecosystem of partners.”

    Even if the metaverse doesn’t become the decentralized crypto utopia that many technology visionaries propose, it will still reshape how we create, interact with and exchange content, as well as change how we work, play and live. Along this journey, roads will emerge and diverge. 

    What business leaders must understand

    The metaverse won’t be defined by a single platform or experience. It will likely evolve in a bottom-up approach across many different platforms, with interoperability emerging over time. Not unlike the new business models created by cloud or mobile computing, the scale and impact of the metaverse are yet to be known. Over time, technologies will mature, and the emergence of more compelling applications and experiences will finally deliver on the promise of more advanced and widely adopted AR/VR capabilities. In addition, consumer propensity to engage with these enhanced immersive experiences will increase, and, as consumers place increased value on digital assets and digital versions of real goods, opportunities for payments, custody and collateralization services will be created.

    While these external forces must mature and converge for the metaverse vision to become reality, this doesn’t mean that the right course of action is to patiently wait for the moment when it all becomes clearer, even if early ROI is likely to be negative. Disrupters have been building their vision of the metaverse for many years and have been significantly investing in metaverse development to date. The ability to transact with crypto-based payment methods is here today and is being applied to many early metaverse experiences. Cryptocurrency is being used to purchase digital assets, like non-fungible tokens, and even physical goods for real-world delivery.

    At the time of this publication, two sovereign nations, El Salvador and the Central African Republic, have adopted crypto as legal tender. One nation, Barbados, has announced its intent to build a diplomatic presence in the metaverse. But the space is complex, the learning curve and trepidation of customers who are unfamiliar with crypto is high, and early experimentation and interest have not yet converted into widespread adoption. Still, we anticipate that demand will only expand. Traditional financial services firms can play a role in building bridges between traditional finance and decentralized finance. Major financial institutions have already launched a presence in Decentraland and The Sandbox and have announced the availability of digital assets in 401(k) accounts, metaverse, and Web 3.0-related ETFs and custody services.

    For both traditional financial services firms and Web 3.0 companies, the journeys will be different. Web 3.0 natives must grapple with risk management and regulatory compliance, as well as security and resiliency measures. Traditional financial institutions must begin to understand how these concepts come to life in a metaverse and Web 3.0-enabled world. Both must consider how the metaverse could become an imperative for their current and future customers, and consider the timing around when to act, where they should play, what they should build and how to bring their vision to life.

    All of this will require firms to assess where their opportunities and exposures exist relative to the evolving market and competitors.


    Today, our clients are building metaverse teams and capabilities. They’re experimenting with virtual experiences for recruitment, onboarding and training, and leveraging immersive ways to transact. Firms are working to tokenize physical assets, establish foundational Web 3.0 connectivity and interact with customers. By doing so, they are internalizing the necessary learning they’ll need to bring clarity to the unknown. These early learning experiences, which will include failures, will enable them to effectively pivot to the correct operating models, a new type of skilled workforce and monetization schemes as the vision for the metaverse becomes a reality over the coming decade.

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