The heart of the matter: three predictions for 2022

Written by Dave Wallace
7th January 2022

It’s that time of year when crystal ball gazing is de rigueur. So, as we look into 2022, here are three of my top predictions.

The Metaverse and Web 3 start to trend!

The heart of the matter: three predictions for 2022

My first prediction is that 2022 will see financial services brands trying to understand the Metaverse and Web 3 and end up getting very confused.

As 2021 ended, a couple of things happened that pointed to a new chapter for the Internet. Firstly, Facebook rebranded as Meta, highlighting Zuckerberg’s view that the next wave of the internet is upon us; the Metaverse. Secondly, Jack Dorsey stepped down from Twitter to focus on Block and immediately went to war over who owns Web 3.

So, what are the Metaverse and Web 3?

USA Today defines the Metaverse as “a combination of multiple technology elements, including virtual reality, augmented reality and video where users ‘live’ within a digital universe”.

Zuckerberg wants to own the Metaverse, or at least Meta/Facebook’s version and keep control, which is at odds with Dorsey, a Bitcoin and blockchain enthusiast who sees a decentralised future.

Web 3, also known as Web 3.0, is defined on Wikipedia as “an idea for a new iteration of the World Wide Web that incorporates decentralisation based on blockchains. It is often contrasted with Web 2.0, wherein data and content are centralised in a small group of companies sometimes referred to as ‘Big Tech’. Web 3 is blockchain.”

There are crossovers, but the two concepts are different.

Financial services companies will make targeted investments to make sense of both the Metaverse and Web 3, essentially trying to sort fact from hype.

The Metaverse is most likely to be treated as a channel opportunity, with institutions buying virtual real estate in platforms such as the Sandbox and building branches. Others will look at the advertising potential and try in-game marketing or e-sports sponsorship.

As for Web 3.0, Bitcoin and other digital currencies have demonstrated that finance can exist outside of “The System”. This trend will likely continue, and blockchain technology will be an increasing disruptor for the financial services industry. Platforms have already developed economic ecosystems that take end-users away from the establishment. For example, the Sandbox has a digital currency built on the Ethereum blockchain called $SAND. Ownership for acquisitions made within the platforms is through non-fungible tokens (NFTs).

Blockchain offers up incredible opportunities for innovation. For example, encoding blockchains with information beyond monetary use offers intriguing possibilities. Indeed, if you buy Ethereum today, you invest in infrastructure, not just a digital currency.

I read an article in the Wall Street Journal recently, and this quote says it all: “This dual function illustrates the inspired weirdness that is Web 3: If money can become code, then money can be way more than a means of exchange; it can also do anything that other software can do”.

The penny dropped for me. Minting new currencies that perform specific jobs is such an interesting idea. I have talked previously about carbon becoming a currency. Imagine a Green-leaf coin that can only be used to buy or sell goods, services or investments that have been recorded on a public ledger as being climate-positive. And its cousin, the Anthracite coin, which can only be used to buy and sell goods and services firmly marked on a ledger as being in the polluting camp.

To misquote Marshall McLuhan: “The money is the message”.

Carbon footprint calculations will be in most bank apps

By 2022, most big institutions will have functionality that translates transactional data into a carbon footprint. This is excellent news for the companies that offer these services and is fantastic news for raising awareness of carbon usage.

But I do have a concern. Knowing how banks work and their keenness to get this functionality embedded in their accounts, there is a danger that they will overlook the user experience.

I read a brilliant article by Trevor Hinkle on the user experience challenge of carbon tracking. He helped design an app to help people track their carbon footprints. It started well, but he quickly realised that after the initial interest, little changed month-by-month and user interest quickly waned. The danger is that simply delivering this functionality will not be enough.

The banks that provide this functionality need to think about how to market it to customers on an ongoing basis. They need to think about content strategies that inspire and help nudge customers and find ways of bringing them back to the information. Ultimately, they need to find ways of ensuring customers engage.

Digital engagement based on personalised insight will become a much higher priority

Carbon calculation demonstrates how transactional data can enrich and enhance digital banking to provide an additional layer of information that can be of value to users.

If banks can get this right, it will demonstrate how helpful the digital platforms for financial institutions can be in building engagement with users. Then I think there might be a collective light bulb moment when banks realise that their digital platforms are a customer asset, not just a channel, and understand that they offer an opportunity to build better customer relationships.

So, in 2022 there will be more focus on delivering engagement to customers through digital platforms based on personalised insight.

About the author

Dave Wallace is a user experience and marketing professional who has spent the last 25 years helping financial services companies design, launch and evolve digital customer experiences.