There has been much talk of the metaverse, which heralds a realistic online virtual world that will be the future of the internet as we know it. It looks set to impact on all aspects of life, from our health to how we learn, watch entertainment, consume information, shop, interact with one another, engage on social media, earn money and conduct business.
In fact, Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse for the aforementioned purposes. This makes it a lucrative endeavour, with recent findings from international consulting firm Analysis Group suggesting that it could add $3 trillion to the global economy within a decade if it evolves in the same way as mobile technology.
In the meantime, Bloomberg Intelligence expects an increasing number of organisations to jump on the bandwagon, pushing the market size to $800 billion by 2024.
Bearing this in mind, we simply can’t ignore the potential implications of the metaverse for Compliance professionals as the industry dips its toe in the water. This includes what it means for them, how the new tools and new ways of working will change the risks they are responsible for and how they will be managed.
What it might mean for risk and compliance
Compliance teams tend to be focused on traditional compliance risks, such as fraud, theft, bribery, money laundering and embezzlement and other areas, such as modern slavery and the supply chain.
However, those businesses that embrace the metaverse are likely to observe a shift in the risks that they are responsible for mitigating. To that end, they might discover ways in which existing risks mutate in different ways and under varying guises.
For example, developments and innovations within the metaverse will give rise to newly invented objects, products or services of commercial value which might be subject to bribery and corruption. It’s also worth considering that the metaverse could complicate the anti-money laundering process. For example, the AML laws which protect companies might not immediately extend to the growing metaverse and the new activities going on within it. This will result in organisations being left vulnerable and exposed until more up-to-date regulatory frameworks are developed and passed into law.
Entirely new and unprecedented risks may also emerge. This could manifest as the additional challenge of identifying and verifying the source of who your customers or suppliers are or tracing the origin and authenticity of any virtual assets which are exchanged. Furthermore, activities that were once the domain of IT security professionals, such as digital ID or other token verification, could be transferred to Compliance teams to oversee.
So how might this alter how compliance works?
The metaverse and the new technology which is sure to arrive with it will provide opportunities to manage relevant risks and prevent Compliance breaches in exciting and innovative ways. This may lead to opportunities for increased time saving and cost efficiencies without compromising on quality of service.
Some technologies associated with the metaverse are already in use. For example, it’s currently possible to use augmented reality to train global teams with instant translation. This has the added benefit of delivering on ESG and net zero targets as it reduces people having to travel for work.
Existing technology, such as tools which confirm authenticity of confidential documents of key documentation, such as proof of ID, are also likely to be key in achieving security - while ensuring that all operations are fully compliant - within the metaverse.
Ultimately, the emergence of the metaverse, alongside the technological developments that go hand in hand with it, will expedite businesses' needs to update existing policies, frameworks and procedures. This is to ensure that they successfully reflect any new ways of working and the likely emergence of increasing regulations being introduced.
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