How does Web 3.0 affect financial systems?
Mankind is on the verge of a new evolutionary form of the Internet, which has already been dubbed Web 3.0. This new concept has the potential to become the basis for an economy where all content consumed by humans will be adapted to the user as much as possible. Applications, technologies, and services have already been created, which will become the foundation of the new ecosystem. While we are waiting for the infrastructure to be implemented, I suggest we look into what Web 3.0 is and what impact it can have on financial systems.
Web 3.0 is the next generation of the Internet, where services, purchases, and content will be based on artificial intelligence technologies, 5G networks, decentralized registries, and machine learning. The whole point is to build an independent intelligent system where all data will be linked by decentralization. This is necessary so that users on a par with machines can access data directly. However, the final stage of the Web 3.0 will be the development and implementation of artificial intelligence, because it is important not only to understand the concept of information but also its context.
The next-generation Internet will be very different from what we were dealing with before. Web 1.0 worked like a huge data catalog, where special technical skills were needed to share data. At the same time, it was difficult to find the necessary information. Web 2.0 gained interactivity through the development of social networks and applications. The distribution of content became much more influential because everyone got the opportunity to create and share their files. But in fact, it is the sites where the content is posted that own all the data, not the creators. Web 3.0 should be the next stage in the development of the Internet, where users will own all the rights to their content through decentralization. Cloud technology and the semantic web will be its hallmark, which includes artificial intelligence, machine learning, and blockchain.
Over the past few years, financial technology has become closely intertwined with new formats of the Internet, which are now involved separately. Fast transfers, blockchain-based information security, and cloud-based data storage at large financial institutions are all just the beginning. Institutions are actively innovating and introducing new services for their users to improve the customer experience and empower services. As one of the world’s largest financial centers, Singapore is focusing on technology. In 2021, the government has allocated 680 million Singapore dollars for industry development and research in the field of artificial intelligence.
With the increasing role of Web 3.0 and its attendant technologies, banks should rethink their approaches to customers. For example, implement technologies that can transform user interactions to deliver seamless banking experiences. Financial institutions looking to participate in the digital revolution should pay more attention to cryptocurrency and digital money because they are more efficient, less costly, and more transparent. The cryptocurrency market was $2.2 trillion at the end of 2021, a trend that says it will continue to grow thanks to the introduction of new currencies.
The application of new technologies also stimulates developments in the field of security. Blockchain technology, fully implemented on Web 3.0, is designed to provide cryptographically secure transactions. Thus, users no longer need to rely on one centralized financial object.
Web 3.0 is a new wave in the fintech industry, capable of completely changing the market of services provided. Positive trends in this direction are also observed in the domestic financial market. The first blockchain-based e-money project is planned to be launched in Ukraine under the supervision of the NBU, which can make money transfers cheaper and more secure for customers.