Are banks and their partners prepared for 5G? As the roll-out of this technology continues, Louise Lunn, vice president, Global Analytics Delivery at FICO examines the challenge facing European banking.
The comprehensive roll-out of 5G across the UK and the rest of Europe is due to be completed within the next five years.
Many analysts, however, agree there’s already a notable lag behind North America and Asia, so banks in Europe must ensure they are ready to utilise the upgrade the moment it is complete.
5G’s arrival is expected to drive a predicted £495.4 billion in global business opportunities during the next decade.
Of this, analysts expect around £159.2 billion worldwide will come directly from analytics and real-time automation, powered by the 5G data explosion.
But the big question is whether the massive amounts of data created by 5G will swamp ageing, legacy infrastructures of companies that don’t invest or innovate.
All banks, lenders, financial services providers, telcos and fintechs can directly benefit from 5G’s adoption, as it will enable scaled-up connectivity to their customer base via even more devices.
It’s predicted it will also set off an avalanche in the adoption of the Internet of Things (IoT), driving a surge in the number of connected devices – from smartphones, wearables and home appliances to sensors on all kinds of objects, be they public infrastructure or even clothes.
It’s also fair to say 5G is likely to have a direct impact on further empowering consumer-centric legislation like PSD2 (The Payments Services Directive 2), which is putting customers in the data driving seat by offering them a clear say in how personal information is shared and used by selected businesses.
As a result, it will also become more important than ever for digital businesses to be able to plug into scalable machine learning and adaptable analytics platforms, as the use of third-party application programming interfaces (API) and third-party apps in driving the growing opportunities Open Banking offers consumers.
As connectivity continues to expand at an exponential rate, payment and ID verification technology will surge.
As well as driving internet use generally, 5G’s high-speed bandwidth will enable a denser concentration of devices within a geographic area, but it will also be able to seamlessly link them.
Emerging 5G technology will also help to unlock a mass of insight and opportunities for a slew of industries.
In banking, analysts predict remote intervention 5G will help support financial services to be even more precise with ongoing fraud analysis, monitoring of suspicious transactions, or sizeable data uploads to inform critical decision-making, thanks to super-fast connected devices.
But the challenge right now is to make sure systems are not only fit for purpose today, but future-proofed for tomorrow.
And there is a priceless opportunity to unleash the power of analytics and AI to drive smarter data-driven business decisions at scale – as long as ageing legacy infrastructure is upgraded as a matter of urgency.