It was 2021 that the term metaverse spiked, seemingly everywhere as poster boy Mark Zuckerberg hailed it as the future of the internet and even changed his company’s name to Meta.
Recently there has been less hype around the metaverse, but that doesn’t mean it’s gone away, and it turns out broker-dealers are among those experimenting with it. And Finra is concerned about the potential risks.
In a new report titled The Metaverse and the Implications for the Securities Industry, the regulator says that usage by the financial services industry may not be as prevalent or prominent as that of the gaming industry, but it is being considered by financial institutions for potential benefits of engagement with younger customers and for enhancing operations.
“A segment of financial institutions, including broker-dealers, are actively experimenting with incorporating the metaverse and its immersive technologies,” according to the report.
The report looks at applications, use cases and challenges for Finra member organizations and certain regulatory considerations.
Use cases being considered or explored by firms include:
Challenges include resource needs, data privacy and protection, and cybersecurity.
“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,” said Haimera Workie, Vice President and Head of OFI at FINRA. “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.”
Regulatory considerations by firms regarding their use of the metaverse will depend on specific use, but Finra says that firms should apply similar compliance oversight as they would for any other technology or tool.
It notes that the report does not provide an exhaustive list of regulatory issues or factors and does not create new rules or requirements, nor does it exempt firms from their obligations under federal securities laws and regulations.
Finra is seeking feedback from firms, market participants and others currently exploring the metaverse through March 14, 2025.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
