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Q&A: Southeast Asia’s largest bank bullish on the metaverse

  • There are limits to what financial services can create in terms of content-driven experiences, DBS chief compliance officer tells Blockworks
  • The company plans to increase its technology-focused force by an average of 1,000 employees per year over the next few years

The struggles of the cryptocurrency market might currently be in the spotlight, but companies haven’t lost sight of the opportunities around the metaverse. More traditional banks want to implant value-added financial services in the metaverse, and some are taking up the challenge of introducing financial interoperability between one or more digital worlds and the physical world.

Singapore-based DBS Bank believes that current narratives around the metaverse are missing a fundamental point of putting humans at the center.

Lam Chee Kin, Head of Legal Affairs and Compliance at DBS Bank, wrote in a recent post that he doesn’t entirely agree with the web3-centric view of token-based or NFT-based gaming metaverses. . He believes that the virtual world offers humanity a promise of escape and fulfills the need for more opportunities for progression and achievement.

Having invested more than S$1 billion ($722 million) on average over the past four years in its technology infrastructure – including the metaverse – DBS Bank expects its technology bench to grow by an average of 1,000 employees per year for the next two years.

Below is Blockworks’ conversation with DBS Bank’s Lam Chee Kin.


Blockworks: How does DBS Bank plan to get involved in the metaverse?

Cheekin: It’s a very nuanced conversation, but it’s essential to note that this is just the beginning. What’s going to be critical is familiarity with the underlying technologies, and that comes down to the idea of ​​being human-centric.

If the future is to be represented by immersive technology, emerging delivery technology, and digital asset technology, then DBS must be increasingly familiar with technological developments in each of these three areas.

The intention is to develop a digital asset capability that would be compatible with the envisioned future. Therefore, our employees should not only acquire the technical skills, but also develop adjacent skills, such as in the legal or regulatory space, in order to make the metaverse a reality. DBS is taking steps in these areas to be ready for that future when it comes.

blockages: Do you think metaverse investments will take time to generate strong returns?

Cheekin: A few articles have recently covered this topic and have shown that Big Tech seems to be going a little slower on the metaverse than you might have expected from the excitement that existed about a year ago. That said, there is no doubt that we are in an inflationary environment and much of the value has come off the stock market. Right now, people are probably a little more risk-aware when it comes to making big moves in this area.

But you can’t just look at tech companies. Another view posits that the metaverse is a perfect platform playing to the strengths of big content brands – those that have created entire content franchises or have extensive experience building story universes. .

Conversations with partners will be relevant as there will be limits to what financial services can create in terms of content-driven experience, but integrating financial services into a partner’s metaverse is also a whole proposition. also valid.

blockages: What names come to mind in Asia or the world you see dabbling in the metaverse today?

Cheekin: Clearly China. If you look at Chinese tech giants like Baidu and Tencent, they all seem to be taking a social view and that’s interesting. South Korean banks have also made public announcements regarding branch virtualization in the metaverse. So let’s say Silicon Valley is one angle, and China is definitely another.

blockages: What do you think are the biggest risks facing the metaverse today?

Cheekin: There are a whole bunch of technical risks. Some are more obvious, like the incredible volatility of the markets. Another would be worries about money laundering and criminal activity on the metaverse.

But in using blockchain, there are opportunities that come with risks. When you become so transparent with the activity on the blockchain, everything gets written, everyone can see what’s going on, and there are good ways to manage those risks.

Another, more abstract risk concerns how digital reality interacts with physical reality. We are all still human beings subject to the rule of law in the physical world. We will have to create a legal scholarship around this.

In terms of social risk, there is a concept in online games called “grief” – which means that the only reason someone plays an online game is to make the lives of other players as miserable as possible. Computer games have known this for decades, and many game developers have become adept at designing problems for their games. We can also learn lessons on how to set up a metaverse that is as grief-proof as possible.

In Japan, there is a social phenomenon called hikikomori — total social isolation of the individual. At the individualistic level, you just have a person who is addicted, or who probably finds more value in their digital life than they find in their physical life. Because of this perception of value, he makes a conscious lifestyle choice to live in the digital world, not the physical world. If you get all this withdrawal from society, then what happens to economic productivity? What about birth rates? We care about the unintended consequences of these movements.

blockages: What is your take on the current crypto market downturn?

Cheekin: There have been winners and losers. Those with experience in financial markets, who could manage market and liquidity risk, will be able to fare reasonably better.

But I think people who may have underestimated some of the technical risks probably suffered relatively more. Keep in mind that in fact the entire market, not just the crypto market, is affected.

This interview is edited for length and clarity.


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  • Shalini Nagarajan

    blockages

    Journalist

    Shalini is a crypto journalist from Bangalore, India who covers market developments, regulation, market structure, and advice from institutional experts. Prior to Blockworks, she worked as a markets reporter at Insider and a correspondent at Reuters News. She holds bitcoin and ether. Join her at [email protected]

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