BNY Mellon on Moving to the Metaverse Safely

Carl Slabicki, co-head of global payments at BNY Mellon, has news for anyone wondering when Web 3.0 is going to arrive: It is already here and already a big part of conducting business.

Pointing out that the web is already facilitating face-to-face meetings between individuals hundreds or thousands of miles apart and enabling basic business functions, Slabicki made it clear that the future is now.

“It is part of daily life, which will also be part of virtual life,” he said. “They’re trying to simulate … talking, grabbing a cup of coffee or even having a business meeting. Payments and financial capabilities are a part of daily life, right?”

But there will be changes in the ways organizations make and accept payments, Slabicki said — and we all need to keep this brave new world secure.

Maintaining and Securing Infrastructure in the Metaverse

As we move into a virtual business landscape, maintaining infrastructure and seamless transactions will become even more important than it already is.

“I think that [infrastructure] is going to allow for a lot of services, including financial services … to be embedded and … provided through multiple providers in the metaverse, which is ultimately a platform,” he said. “It is a room, it is a world, it is an ecosystem [in] which I think there are enough capabilities and enough technology across the banking space now where it is very easy to plug in identity capabilities, risk capabilities, payment capabilities, wallet capabilities [and] data and asset exchange capabilities.”

There are additional layers to this transition, Slabicki noted. From a security perspective, both an upside and a downside of these capabilities is being able to onboard and off-board value from traditional financial instruments, such as checking accounts, to wallets that are hosted in the metaverse.

This forces us to question how secure such transactions might be, and ultimately, the security of metaverse-based digital wallets. Emphasis should remain on the security of payment mechanisms and meeting payment card industry (PCI) standards while ensuring seamless fund transfers from one metaverse user to another and generally improving infrastructure.

Staying Safe in a Virtual World

Those looking to involve themselves in the metaverse will need to focus on which areas will require increased security, and cryptocurrency needs to be top of mind.

“I think when we talk about the jump to other digital assets, … the big questions that need to be sorted out are the risk and compliance and fraud screening standards over transactions that occur within these currencies,” Slabicki said.

One of the most important keys to ensuring compliance is making sure security measures are consistently updated — and, perhaps more importantly, are adopted early and consistently. Two-factor authentication is not new, for example, but according to Slabicki, it is an important ingredient that should be considered whenever sensitive information is at risk.

“Two-factor authentication has been a standard for as long as I can remember,” he said.

Additionally, Slabicki and his team recommend using an application programming interface (API) framework with encryption keys that can be controlled and issued directly to the partners with which they are engaging. His team also uses a very specific management process around security keys, ensuring only trusted partners can use or access them.

Ultimately, Web 3.0 holds great potential for both merchants and consumers, according to Slabicki.

“Where I think it’s going, there will be a very quick, accelerated path to getting some of the traditional services into these accounts to make it easier for people to put money in, move money around, engage with individuals, buy services and music and virtual things … and I think that is why I’m excited for the near-term future.”

It is just a matter of making sure we all get there safely.