The Financial Industry Regulatory Authority (FINRA) published a new report on how the virtual metaverse could impact business models and processes.
The report, titled “The Metaverse and the Implications for the Securities Industry,” is intended to raise awareness among FINRA member firms about the metaverse. While the implications of the fledgling metaverse may not be known for years, the report explores potential applications, use cases and challenges, along with regulatory considerations.
The metaverse includes virtual worlds that are immersive, interactive and may be experienced in new ways through technological developments. While the gaming industry has long been active in the metaverse, financial institutions have increasingly been exploring the metaverse to engage with the next generation of customers.
“While we are already seeing the metaverse being used and experimented with in a number of ways by financial institutions, it is an evolving technology with both potential benefits and risks that need to be better understood,” Haimera Workie, vice president and head of FINRA’s Office of Financial Innovation (OFI), said. “We look forward to continuing to have an open dialogue with industry stakeholders to better understand the impact the metaverse could have on FINRA members and investors.”
The report looks at the potential metaverse-related use cases that FINRA members are considering including data visualization; virtual trading; digital twins and industrial metaverse; payments; training and collaboration; investor education; customer solicitation and service.
Further, it examines potential challenges for firms as they pursue a metaverse strategy, including resource needs, data privacy and protection, and cybersecurity.
Finally, it probes regulatory considerations for firms as they consider whether to incorporate the metaverse into their internal systems and processes or use this technology within product offerings. FINRA’s rules, which are intended to be technology neutral, continue to apply if member firms use the metaverse in the course of their businesses, just as they apply when member firms use any other technology or tool.
FINRA is currently seeking comments from firms, market participants and others currently exploring the metaverse. The comments are due by March 14, 2025.