A14

Tomorrow Takes

trust

73%

Customer loyalty

How trust benefits your business

Q: To what extent does building trust in your company, internally and externally, help improve the following? (Response to ‘A lot’) Source: PwC Trust in US Business Survey, Sept. 16, 2021: base of 503 business executives

—MOHAMED KANDE VICE CHAIR, CONSULTING SOLUTIONS CO-LEADER AND GLOBAL ADVISORY LEADER, PwC US

“Each leader in an organization is likely to work with stakeholders with varying definitions and expectations of trust. It is important that leaders consider those different perspectives as they seek to establish and foster trust.”

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58%

Positive reputation

56%

Expanding into new areas/markets

57%

Revenue growth

52%

Employee recruiting/retention

54%

Strong relationships with regulators/policymakers

54%

Brand equity/brand protection

55%

Growing customer base

48%

Strong analyst feedback

50%

Access to capital/financing

Trust in the metaverse

Answers to key questions about the new digital world

If your organization has decided to enter the metaverse, you could face a major new challenge: The old rules for achieving trust in your transactions, assets, data, brand experience, and more may not apply. The metaverse is still very much a work in progress, but it’s advancing quickly, and many metaverse concepts are business relevant today. We’ve been working with clients and with emerging technology leaders to address trust and other metaverse challenges. In doing so, we’ve found some answers to key questions that business leaders should be asking right now. This material can help your company proceed with confidence in an immersive, digital world where you may soon be able to conduct most of the same business activities that you do in real life—and a few new ones too. What is the metaverse, exactly? The metaverse is an evolution, not a revolution. It’s a long-running trend of innovative, new technologies blending into an immersive, three-dimensional digital world. It already allows you and your stakeholders to buy and sell, recruit and train, gather and monetize data, sign and enforce contracts, sponsor events, and implement all-new digital projects. But be careful. Unbound by geography, the metaverse currently lacks clear rules and regulations. How can I trust metaverse financial transactions and other economic activity? Most metaverse platforms encourage cryptocurrencies and other digital assets, which may not have oversight from traditional intermediaries such as banks, clearinghouses, and regulators. Smart contracts may also automate many transactions and asset management activities. To trust how your assets are being handled in the metaverse, you’ll need build up tools and skills. Become crypto fluent, consider hardware-based security for crypto wallets, and develop teams able to audit smart contracts to spot flaws, vulnerabilities, or hidden exploits. Consider new partnerships as well. Both fintech companies and traditional financial institutions offer crypto and digital currency services, and trusted third parties can provide additional control and verification. How can I trust data in the metaverse? The ultimate goal of the metaverse is to become fully interoperable, allowing your customers and employees to take their identities, assets, experiences, and data from one platform to another. The idea is for the current system of “walled gardens,” where each platform provider controls data and sets the rules, to fade away. But without walled gardens, you and your partners could too easily lose control over your data. To hold on, you may need a new approach to data security that follows your stakeholders wherever they go. This approach should include clear rules, especially for consent, so your users understand who is using their data and for what purpose.

“There’s no secret sauce to building trust, but proactively communicating with stakeholders about what you’re doing to build trust—and backing those words with action—is a critical step. Every company has a story, and business leaders need to make sure that the story they are telling is authentic to the company’s actions, operations, and its culture; what we do as organizations isn’t just about numbers—it’s about people, the communities we serve, and making a lasting impact.”

—WES BRICKER VICE CHAIR - TRUST SOLUTIONS CO-LEADER, PwC US

Note: This article was created by PwC.

How should I handle metaverse governance and security? The metaverse right now doesn’t have a lot of governance rules. It also offers many new attack surfaces, including through virtual goggles—potentially causing traumatic experiences. New kinds of metaverse-specific crimes are emerging such as “pump and dump” non-fungible tokens (NFTs) and other fraudulent metaverse investments involving crypto tokens. For governance, get up to speed on decentralized autonomous organizations (DAOs) built on voluntarily, agreed-upon rules enforced by a computer program that runs on a blockchain. For cyber defense, consider security measures at the services level that accompanies your assets as they travel through the metaverse. Reassess vendors and partners to see that their platform providers and cybersecurity firms have updated their security playbooks for the metaverse. How can I trust digital identities in the metaverse? In the metaverse, people, assets, and organizations may own their digital identities, complete with data, history, and assets that they can use anywhere. This is different from today’s internet, where customers, assets, and employees generally have specific identities just for specific companies or a particular platform or application. This decentralization may make it harder for you to trust identities and protect your stakeholders. To boost trust, consider blockchain-based credentialization services and metaverse versions of multifactor authentication and multi-signature verifications. Software can help detect anomalies and impersonations. You may also want to join one of the coalitions developing digital identities to help ensure that they’ll meet your needs. At the same time, monitor other coalitions for opportunities to adapt their data governance and authentication strategies. How can I offer stakeholders a trusted metaverse experience? A privacy violation or attack could be intensified if suffered when immersed in a three-dimensional world. When your stakeholders enter your virtual spaces, they’ll be trusting you to protect them. Your brand could pay dearly if users experience aggression, extreme behavior, privacy violations, or misinformation within your metaverse environment. If you participate in metaverse environments like virtual storefronts or entertainment, consider new protocols and controls, including third-party oversight, as well as impartial content moderation teams to cut down on misinformation, harassment, and abuse. You may also need to adapt your privacy controls to a digital world that allows its users to do much more, and reveal much more, than on the internet today. How do I build trust for when no one is looking? Even after your customers or employees remove their virtual reality (VR) or extended reality (XR) headsets, smart contracts in the metaverse will keep enforcing agreements and trading assets. Digital products will remain on digital shelves, ready for other digital users to buy them. Virtual machines will keep producing virtual widgets. To make sure that your company’s virtual activities work as desired, rethink digital services, monitoring, and controls. Blockchain, when combined with artificial intelligence (A.I.), can in some cases automate the authentication of identity, assets, transactions, and contracts—helping maintain trust in ongoing metaverse activities. And independent teams, internal and external, may be used to audit both smart contract code and its underlying hardware and software infrastructure. Authors Frank Badalamenti Roberto Hernandez Vikram Panjwani Emmanuelle Rivet

Note: This article was created by PwC.