Last week, I travelled to Amsterdam along with several thousand other banking and securities industry people for the first in-person Sibos in three years. It was a busy week, catching up with clients and friends across the four days in the RAI, but the highlight (as always) was chairing a couple of the sessions with a host of interesting speakers from various market infrastructures and banks. Usually, the majority of questions submitted during conference sessions are addressed naturally by the speakers before we even get to the Q&A, but occasionally someone asks something that you completely don’t expect.
The question this time around was something related to the latest buzzword in the fintech realm: the metaverse. To set the question into context, over the four days numerous vendor sessions and panels across the show floor were dedicated to the topic of the metaverse. What it means for the crypto community, how to set your client-facing operations in the metaverse, how much money is going to be spent on it in the next decade… you get the idea. All incredibly bullish on the move to a virtual environment in the future.
The panel in question, on the other hand, was dedicated to discussing the ins and outs of environmental, social and governance (ESG) in the current environment and the related regulatory agenda. I set the context by highlighting the 592 E, S or G related regulations in place across the globe and other important stats, the panel ably discussed how their respective firms and clients have been responding to these changes and the demand from investors for more transparency in these three areas. Definitely not a metaverse-heavy discussion topic.
The question therefore jumped out at me from the Slido app as I perused audience input. It was along the lines of: ‘everyone has been talking about the metaverse this week but is it compatible with a sustainable future?’ Now, we took a slightly different tack in answering it, broadening it from the E to the full ESG complement. It also sparked some interesting conversations from both panellists and attendees after the session finished.
The upshot was something that seems to often get missed out by industry metaverse conversations. What is the social impact of moving to an immersive virtual environment? Could societal bonds and norms be broken down by a world where the normal rules don’t apply and real life seems mundane in comparison? What damage could this wreak on individuals and communities? What kinds of ethical problems could be caused by living and working in a metaverse? How could you possibly control that environment adequately without ending up in the Matrix (sans Keanu Reeves, potentially, though he could be recreated…).
Once you start thinking about it all, it seems like a minefield of S and G problems. Yet, if we focus purely on the revenues that could be generated, we might lose sight of the downsides we are creating. I also struggle to see its real securities business relevance outside of networking with delegate avatars or viewing mock-ups of virtual investments like real-estate in the short term.
Could Sibos be hosted in the metaverse in the future with delegates with shark heads and frog bodies (or some such other bizarre mashup)? Yes.
Do I think that would be preferable to interacting with actual humans? The answer, clearly, is no.