The Promise of 5G: A New Tomorrow for the Finance Industry
The fifth generation of broadband cellular technology (5G) will soon be at our doorsteps, and rumor has it 5G will pose as much of a disruption as did the first moon landing.
Currently, nations are racing to create the sturdiest test bed for 5G in the hopes of attaining the competitive advantage the United States had with LTE. The idea is that products will be marketed and deployed first in whichever country is better equipped to receive them.
This time, China appears to be winning thanks to its commitment to investing US$400 billion over the next five years.
But, will the arrival of 5G truly change our understanding of the world, our limits and how we conceive the future?
The idea behind 5G
Now that people are connected through social media and instant messaging, the newest broadband network looks to connect stuff. 5G will power the famous “Internet of Things” (IoT), while increasing download speeds and bandwidths by a tenfold.
Experts at Gartner believe 20 billion devices will be live and connected by 2020, more than double the world population.
However, the word “device” doesn’t necessarily mean smartphones, computers or tablets, but rather a range of one-function objects in continuous conversation with one another.
People are the most excited about automated vehicles and telehealth, but 5G doesn’t stop there.
To put it in Deloitte’s words, “5G makes possible the connection and interaction of billions of devices of almost any kind and collection of data from those devices. Indeed, 5G connectivity promises to lead consumers, industries, and governments to new frontiers of productivity and innovation.”
Let’s see what that means for money.
How 5G will disrupt the finance industry
Every day, there are more customers looking to perform an even greater number of monetary transactions. Thus, one of the most anticipated changes for the finance industry is low latency, defined as computer networks optimized for processing a high volume of data, which will make transactions truly instantaneous despite the constant increase in demand.
However, connectivity will be the one 5G functionality to rule them all.
As the finance sector grapples with the inner workings of banking apps and mobile wallets, 5G will open up a breadth of possibilities, awakening dormant objects like wristbands, cards or even pens. These things have the potential to become low-cost access gateways to financial services, which could have a favorable impact in the remittance industry.
Affordable financial devices might grow into a new form of banking, reaching those with limited access to traditional channels and thus fostering financial inclusion. That being said, it will all depend on 5G’s capillarity once it is activated. Will it truly power every corner of the world, or will 5G remain just another developed-world commodity?