There are limits to what financial services can create in terms of content-driven experiences, DBS’ compliance head told Blockworks
The firm expects to grow its tech-focused strength by an average of 1,000 employees annually over the next few years

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

Singapore-based DBS Bank, for one, believes the current narratives around the metaverse miss a fundamental point of putting humans at the center.

Lam Chee Kin, the head of legal and compliance at DBS Bank, wrote in a recent paper that he doesn’t entirely agree with the Web3-centered view of token or NFT-based play-to-earn gaming metaverses. He’s of the opinion that the virtual world gives humanity a promise of escapism and fulfills the need for more avenues for progression and achievement.

Having invested over 1 billion Singapore dollars ($722 million) on average over the past four years into its technology infrastructure — including the metaverse — DBS Bank expects its tech bench to grow by an average of 1,000 employees annually over the next couple of years.

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

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

Chee Kin: That’s a very nuanced conversation, but it’s key to note that it’s early days. What’s going to be critical is familiarity with underlying technologies, and this goes back to the idea of human-centeredness.

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

The intent is to develop a digital assets capability that would be consistent with the future envisaged. Consequently, our people would need to pick up not only the technical skill sets but also need to develop adjacent skills, such as in the legal or regulatory space, in order to make the metaverse a reality. DBS is making moves in these areas in order to be ready for that future when it comes about.

Blockworks: Do you think metaverse-related investments will take time to reap solid returns?

Chee Kin: A few articles recently went into this and showed Big Tech appears to be going a bit slower on the metaverse than would have been expected relative to the excitement that existed about a year ago. Having said that, there’s no doubt that we’re in an inflationary environment, and a lot of value has come off stock prices. Right now, people are probably a bit more risk-sensitive in terms of making big moves into this area.

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

Partner conversations are going to be relevant because there’ll be limits to what financial services can create in terms of a content-driven experience, but embedding financial services into a partner’s metaverse is also an equally valid proposition.

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

Chee Kin: Clearly China. If you look at the Chinese technology giants such as Baidu and Tencent, they all appear to be taking a socially-focused view and that’s interesting. South Korean banks have also made some public announcements around branch virtualization in the metaverse. So let’s say Silicon Valley is one angle, and China is definitely another.

Blockworks: What are the biggest risks that you see the metaverse facing today?

Chee Kin: There are a whole bunch of technical risks. Some are more obvious, such as the incredible amount of market volatility. Another would be worries of money laundering and criminal activity on the metaverse.

But in using the blockchain, there are opportunities that come with risks. When you become so transparent with activity on the blockchain, everything is written, everybody can see what’s going on, and there are good ways of managing these risks.

Another risk which is more abstract has to do with how digital reality interacts with physical reality. We’re all still human beings subject to the rule of law in the physical world. We’ll need to create a legal scholarship around this.

In terms of social risks, there’s a concept in online gaming called “griefing” — which means that the only reason a person plays an online game is to make other players’ lives as miserable as possible. Computer gaming has known this for decades, and many game developers have become adept at designing griefing out of their games. We can similarly learn lessons on how to set up a metaverse that is as protected from griefing as possible.

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

Blockworks: What is your view on the current crypto market downturn?

Chee Kin: There have been winners and losers. Those with financial markets experience, who could handle the market and liquidity risk, will be able to come out of this in reasonably better shape.

But I think the people who perhaps underestimated some of the technical risks have probably suffered relatively worse. Bear in mind that actually the whole market, not just the crypto market, is being affected.

This interview is edited for length and clarity.

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