5G, the next big revolution in technology, will be a leap forward directly impacting industries like home, retail, media, education, healthcare and financial services, and indirectly, financial technology – FinTech.
What is 5G?
5G is the fifth generation of mobile network technology. This technology will address key issues like connectivity, latency, and bandwidth — in other words, promising much faster data download and upload speeds. (Source)
What’s the key difference between 1G, 2G, 3G, 4G, and 5G?
First generation (1G) mobile technology introduced the wireless telephone. It only facilitated mobile voice calls.
Second generation (2G) saw the advent of SMS and email and we slowly saw pagers being replaced with mobile phones.
Third generation (3G) introduced mobile web browsing with higher-speed transmission.
Fourth generation (4G) brought video and higher data speeds which allowed users to browse the Internet. 4G technology facilitated the explosion of the Apple Store and the Google Play store.
Fifth generation (5G) – the technology to facilitate the digitalization of industries. The low latency communication being launched in 5G will take the Internet of Things (IoT) to a new level, allowing the advancement of moving objects such as cars, and promoting the development of smart cities.
What is latency?
Early stages of 5G
5G technology is in its early stages and it will take around three-to-five more years to be fully deployed so that mass consumers can enjoy its true potential.
The video below demonstrates the technology in real-time.
The 5G impact on the financial sector
Up until now, the changes to the financial sector were minimal. We can view our transactions online, make payments, open an account, and get a mortgage (depending on how comfortable you are borrowing online). The banks have been increasingly trying to digitize their services through investing in FinTech; however, according to CB insights analysis, 5G will accelerate this process because the network will be able to handle a larger number of transactions compared to its predecessor. The process will be streamlined through mobile technology and made accessible to a large population, especially in rural areas.
People getting access to banks in rural places
Astonishingly, around 1.7 billion people worldwide do not have access to a bank, but with 5G and instant access to the mobile phone, this issue could be resolved. A small figure to explain the impact of the mobile phone is that in 2011 to 2014 (era of 4G ) there was a 62% increase in people having a bank account; a total of 3.8 billion people in the world now have access to a bank account.
Tech giants getting involved in financial services
Tech giants like Apple, Samsung, Facebook and Google will become more involved in the financial world. Apple Pay, Samsung Pay, and WeChat offering payment services will provide a more compelling reason for consumers to abandon their physical wallet entirely.
The question is:
Is the financial sector ready for the big disruption that is already on their doorsteps? It is too late to say that “time will tell” whether the banks are ready for the technological change because the time has already come and those that are ready will thrive and others will die.
Additional reading if you want to learn more about the 5G revolution
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