The demand for high-speed, reliable internet connectivity has skyrocketed recently. Whether it's the rise in remote working because of the COVID-19 pandemic, or an increased number of businesses now storing and backing up their data in the cloud, having access to high-speed internet has never been more crucial to businesses across every sector – and financial services isn't any exception.
It's no wonder, therefore, that 5G communications has been top of the telecoms agenda recently. Europe in particular has been in the lead in laying the building blocks of 5G infrastructure: in 2021, the ecu Commission established the 5G Infrastructure Public-Private Partnership, a joint initiative with the European ICT industry aimed at delivering next-generation communication infrastructure solutions. A 5G action plan for Europe was also specified by 2021, aiming to launch 5G services in EU member states after 2021.
Where will 5G lead the finance sector?
Of course, many industries were looking to adopt 5G long before the current COVID-19 crisis, especially the financial sector, with banking giants like Barclays offering insights into how businesses can best put it to use. However, adoption of new technologies have been speeding up in the wake from the pandemic, as businesses search for ways to guarantee they can continue serving customers seamlessly even throughout the lockdown. The shift has far-reaching implications for that industry, and 5G services can be an indispensable aid in bolstering buyer experience and security.
Three areas of financial services particularly will see the benefits of 5G:
1. Driving the adoption of contactless payments
Europe is the largest contactless payment market in the world in terms of size, predicted to develop even further from $10.3 billion in 2021 to $18 billion in 2025. What's more, social distancing measures because of the COVID-19 pandemic have made contactless payments much more important, with the transaction limit increased to lb45 to create socially-distant shopping easier. Crucially, greater adoption of 5G technology will bolster contactless payments even more. For example, 5G offers perks including reduced transaction times, improved operational efficiency, enhanced security and simpler and more customised experiences for purchasers which can boost transaction volumes. As 5G systems allow instant connectivity from a range of devices, more and more customers can get to grips with digital transactions.
2. Enhancing security
The financial industry can also adopt 5G technologies to increase their organisation's security. Using the rise in digital wallet services such as Apple Pay, for instance, causing concern with how secure such transactions can really be, 5G connectivity can eliminate performance glitches in payments created using wearables and IoT connected devices. We have the edge computing capabilities enabled by 5G by way of thanking for this, as data is going to be processed closer to its source and can reach where it needs to go faster and in a more secure way. In addition, but 5G also enables more data to travel across networks in real-time which could reduce fraud prevention, while banks and financial services institutions can use artificial intelligence technologies for example facial recognition and multimodal biometric security procedures more proficiently.
3. Digitising the insurance industry
For insurance companies, 5G will play a pivotal role in transforming the expertise of their customers into a digitally-enabled one, ranging from sending queries to choosing the right policy as well as submitting claims. 5G will even revolutionise customer engagement by allowing customers to obtain insurance quotes through chatbots run by AI and submit claims with the aid of augmented reality. At the same time, insurers can assess the claims and reduce the time for approval using AI software, while the 5G network will be able to support interconnected sensors and devices that may play a crucial role in mitigating and assessing risk.
Thinking from the bigger picture
The benefits of adopting 5G for that financial services industry are innumerable, with a range of firms set to capitalise on its possibility to revolutionise the services offered to customers. Some financial organisations might be concerned that the accelerated implementation of 5G might make them vulnerable to security risks, but as long as organisations remain vigilant and remember the multitude of security enhancements 5G actually offers, the mixture of human expertise and a comprehensive 5G cybersecurity strategy will ensure the financial services sector can adopt 5G with ease – and confidence.
The long-term impacts from the coronavirus pandemic should also be kept in mind, but ultimately, financial services firms should remember 5G's possibility to mitigate some of its effects. It is obvious that 5G can help the financial services industry scale greater heights and promote innovation and productivity – all and keep people connected during these unprecedented times.