Metaverse on the board’s agenda
Date: August 2022
Author: Dr. Suphamit Techamontrikul
Chairman of Audit & Assurance | Deloitte Thailand
The internet is arguably one of the most significant disruptions we have ever seen. It has reshaped how we live, work, and interact in just a few decades. The implications can be staggering when a new technology comes along that could potentially change how we interact with the digital world. Hence why we are now hearing so much metaverse buzz in Thailand, with increasing numbers of brands getting on board. On a national level, the metaverse is in line with the Thailand 4.0 initiative and welcomed, as Thailand is a front runner in e-commerce and 5G technology in South East Asia. With businesses racing to become the first movers in this new digital world, board members play a crucial role in guiding conversations with a sharp focus on strategy and risk.
Radical ways of working and interacting may lead to new business models and opportunities. Unlimited reality blurs the line between offline and online channels, and represents rapidly growing opportunities across industries, from hardline products to services like education and healthcare. Many organizations are jumping at the chance to create virtual spaces and activities for their markets. For example, M Vision Plc, specializing in event organizing, are working with a Singaporean partner to handle land trade management on the Metaverse Thailand project, where virtual land can be bought, traded, and developed.1 When organizations are considering entering into the metaverse, boards must question the business case for pursuing this avenue, and how the opportunities tie into the growth strategy, innovation and talent experience of the company.
Platform and technology selection in the metaverse may be a complex exercise for many companies, especially in the early stages of evolution. New platforms could reorder the competitive landscape in many industries and create new winners, while displacing legacy incumbents. Boards must thoroughly understand what their industry peers are doing concerning leveraging or investing in the metaverse and continue monitoring how this may affect barriers to entry. Consumer-facing brands can explore new ways to introduce influencers and innovative content to this new setting. The telecommunications sector in Thailand has introduced virtual influencers as part of their marketing campaigns, such as AIS announcing Ailynn, Thailand’s first AI influencer, and True Corp. introducing Imma, a renowned AI influencer from Japan. When monitoring the ecosystem, boards need to consider whether their organization should pursue metaverse adoption and development on their own, or develop and leverage from alliances, partnerships, industry associations, or other enterprise relationships.
The current focus on telehealth, accelerated by the pandemic, can evolve to virtual care mimicking the in-person experience. The metaverse could also unlock healthcare innovations, from mental health and pain management, to surgery and physical therapy. In the education sector, online experiences combined with avatars could expand the possibilities for learning and collaboration. For example, tech startup Creative Digital Living recently announced that they are joining forces with 17 Thai universities and other partners to build an educational community in the metaverse, leveraging the power of technology to enhance the education industry.2
Providing an inclusive experience and managing participants’ behaviors is already challenging in some virtual environments, as it can be in physical environments. Organizations must ensure they are proactively building a “responsible metaverse” and effectively maintaining consumer and employee trust. Boards can raise conversations around potential risks from each use case and the ethical implications of new technologies and digital experiences.
Security and privacy
The metaverse presents new cyber vulnerabilities and risks related to digital identity and fraud. Businesses and governments will likely focus on protecting personal information while identifying and addressing these risks. With the full enforcement of the Thailand Personal Data Protection Act (PDPA) enacted, the Thai PDPA and cybersecurity schemes are crucial for managing the growing adoption of emerging technologies, especially the metaverse. The Personal Data Protection Committee (PDPC) will introduce 30 subordinate laws by the end of the year to oversee the data protection ecosystem and standardize operations. In terms of security and privacy, boards must reevaluate that their controls or security processes are sufficient for the opportunities and risks associated with new domains such as the metaverse.
Concepts once only found in science fiction and video games are breaking through the boundaries of reality and entering the physical realm, with the potential to change many aspects of business and personal interactions. Even though some of these ideas are still in the early stages of development, the technology is becoming increasingly accessible. The list of uncertainties, potential risks, and opportunities for boards to understand and explore related to the metaverse is considerable. Therefore, the board of directors has a responsibility to help companies remain focused on how this period of transition in the evolution of technology can be leveraged to achieve the company’s strategy and mission, and to collaborate with related parties to drive the company to the next chapter.