How 5G is transforming the financial landscape
by Julia BeetleMs. Beetle is a Hartford-based financial advisor and blogs regularly on technology and how it is disrupting the way we live, play, and work.
Technology is transforming the way businesses operate, and the financial world is certainly reaping its benefits. In today’s transactional world, connectivity is a chief concern. This is evident in finance as industry players and customers utilize services such as online banking, transfers, authentication, and more. In response, institutions are working towards full mobility so they can increase efficiency and productivity. In fact, Pricewaterhouse Coopers estimates that 82% of companies are anticipating even more FinTech partnerships in the next 3 to 5 years. At the helm of this progress is 5G — a powerful and crucial tool that can aid these efforts.
More than just a trend, 5G opens up many possibilities for other technologies to flourish. Forbes is already touting it as the fuel that will reshape the global economy, and banking and finance are far from exempt.
Perhaps the main appeal of 5G in general is the increased speed of communications it enables. Telecom providers such as AT&T and Verizon are already providing speeds of 300 megabits-per-second — much faster than today’s 4G LTE. Of course, it doesn’t take a tech expert to tell you that speed and efficiency go hand-in-hand. In FinTech, however, “ultra-low latency” is the language. It is defined as the time it takes for a device to deliver a command to a separate server and receive a reply. Currently, it takes a 4G phone 50 milliseconds to process a command, but latency in the 5G age aims to reduce it to under one millisecond. This means little to no waiting time for users and more seamless transactions across devices.
Inter-connectivity and communication
There’s a lot of buzz surrounding the Internet of Things (IoT) and its potentials in business, but the technology requires a solid connection that will ensure the infrastructure won’t come crashing down. 5G solidifies this foundation and allows us to maximize its full potential. One example of the IoT already at work is Progressive, one of the largest US car insurance providers that employs OBD devices and machine learning algorithms to look at driver behavior and adjust their prices accordingly. Smart sensors — another device made possible by the IoT — has also been found to help companies reduce building management system and operating expenses by 30%, simply by leveraging foot traffic and room occupancy data to manage property.
Data collection and management
5G has the ability to collect data from users in real-time, providing insights on everything from user behavior to potential areas of concern. Bloomberg notes how financial data management has shifted from the traditional day-to-day risk management and market-to-market needs. Now, with the rapid growth of financial data, firms must adapt and find new ways to acquire data, and know how to utilize it for trade reporting, collateral management, and better investments.
Higher demand for tech skills
Hand-in-hand with data collection is the ability to study them and draw meaningful conclusions. According to the accounting predictions on Maryville University, the ongoing changes and demands in the industry call for more flexible skills. And with the rise of 5G networks in the workplace, it is no longer enough just to be able to crunch numbers the traditional way. Knowledge in computer hardware and software concepts are imperative, as well as knowing how to blend them with business.
By any measure, cybercrime damages could cost companies as much as $5.2 trillion in the next five years. Unfortunately, the internet wasn’t initially designed to accommodate today’s level of complexity, which cyber attackers have duly taken advantage of. All it takes is a single click for a company’s walls to come crashing down. In finance, when trillions’ worth in wealth are what lies behind those walls, companies can’t afford to put protection on the back burner. However, this is a battle that can’t be fought alone, as it is a global epidemic that requires collaboration and a large-scale response. Working with a team that goes beyond an office’s four walls is imperative, and with this much emphasis on connectivity, 5G can help secure this future.