The Financial Industry Regulatory Authority recently released its latest report, The Metaverse and the Implications for the Securities Industries, detailing how FINRA member firms and the broader securities industry may interact with the metaverse, which the report defines as “virtual worlds that are immersive and interactive and may be experienced in new ways through technological developments in hardware and software.”
According to the publication, the global metaverse revenue opportunity could approach $800 billion in 2024 and could potentially contribute over $3 trillion to global gross domestic product by 2031.
While metaverse activity, which includes virtual reality, augmented reality and mixed reality, is primarily led by gaming and e-commerce, FINRA highlighted several potential applications for the securities industry, such as data visualization, virtual trading and digital twins, which refers to “the digital representation of physical objects.”
Similarly, FINRA also stated several challenges facing firms that may wish to implement a metaverse strategy, chief among these, data privacy and cybersecurity. The report said that firms should consider that they have adequate controls to guard customers’ rights and protect them from bad actors. Other potential concerns included resource needs and decentralization and interoperability.
FINRA also reminded its member firms that FINRA rules “are intended to be technology neutral,” meaning that securities laws continue to apply in the metaverse and that firms should continue to apply the same compliance oversight to the metaverse as they would with any other tool or technology.
Finally, FINRA reported that it is seeking feedback from member firms and financial industry market participants who may be currently utilizing the metaverse. Comments are requested by March 14, 2025.
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