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How 5G will Change FinTech in Africa


 Nigeria recently expressed its readiness to roll out 5G networks just as it kick-starts preparations to ensure the roll out by 2020 is a success. The country has earmarked three spectrum bands 26 GHz, 38GHz and 42GHz bands for trial in Lagos and other parts of the country.

That was also as the umbrella body of Global System for Mobile communications companies, GSM Association (GSMA) highlighted modalities that would help the country achieve a robust 5G platform by 2020.

Speaking at a collaborative meeting between NCC and GSMA in Abuja, to facilitate 5G policy and spectrum, the Executive Vice Chairman of the NCC, Prof Umar Danbatta, said although the NCC was not ready now in terms of policy and regulations, it has however kick started processes and reserved three frequency bands to facilitate 5G roll out.

Danbatta promised that Nigeria would ensure it stays ahead in innovation and new tech developments, considering that economies all over the world have become dependent on mobile communications.

Meanwhile Africa’s largest mobile operator, MTN has collaborated with network equipment provider Ericsson on its 5G trial and found that the technology is at least 100 times faster than 4G.

MTN says it has achieved download speeds of more than 20 gigabits per second in its first trial of fifth-generation (5G) technology in its laboratory in South Africa.

“This is the highest achieved on a mobile network in Africa‚” the service provider said in a statement, adding that it was ready to deploy the technology commercially but could not do so until it had access to additional frequency spectrum.

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But will 5G change the banking industry? Will it affect how FinTech firms deliver their solutions?

There is no doubt that the dawn of 5G will further force banks to undertake massive reforms in the way they use technology for internal operations and customer engagements alike.

Many familiar banking operations such as payment services will attain new forms extending to newer channels including 5G smartphones, wearables, IoT devices and virtual reality.

The increased security and speed made possible by 5G will also revolutionize the capital markets, shortening settlement cycles considerably and removing latencies with real-time mobile trading capabilities.

Prof Umar Danbatta, says although the NCC was not ready now in terms of policy and regulations, it has however kick started processes and reserved three frequency bands to facilitate 5G roll out

Let’s look at how 5G can potentially transform the banking and capital markets:

  1. Mobile as the main channel for banking

With mobile money and mobile banking adoption rates growing steadily in Africa as outlined by several reports, it won’t be a surprise if the convenience and security enabled by 5G makes mobile the centre of all banking transactions in the continent in years to come.

  1. Mobile as credit/debit cards

The security features of 5G may wipe out the need to carry multiple plastic cards and replace them with a single, all-in-one mobile wallet.

  1. Mobile as digital identity

As biometric security evolves and more and more smartphones are fitted with fingerprint scanners and facial recognition features, the mobile will become its owner’s digital identity gateway. It will also help prevent fraudulent activities through location capture and other features.

  1. Digital deposits, payments and P2P lending

5G along, with the evolution of blockchain technology will make deposits, payments and lending totally digital. Peer-to-peer (P2P) lending made possible through blockchain and distributed ledgers will transform traditional lending activities.

  1. Wearables and smart home devices

Wearables can be empowered with 5G connectivity to enable common banking transactions on the go. This may also include new age innovations such as the voice-first devices and other connected devices (think connected cars).

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  1. Virtual personalized services

Banks could use 5G to significantly streamline and enhance their operations with faster, more reliable network connections and virtual reality.

  1. Internet of Moving Things

Recently, Citibank tested the use of the Bluetooth-enabled beacon technology to provide 24/7 branch ATM access to their customers over their smartphones. In another use case, bank branches could be fitted with sensors to detect when customers approach, to quicken services and roll out targeted offers.

  1. Better asset and mortgage management

Credit underwriting will also get transformed thanks to IoT and sensors that can be fitted to collect the requisite data for monitoring and management.

Banks, capital market operator and insurers that embrace the technology to reap its manifold benefits are very likely to emerge winners in the digital race. By preparing for this imminent transformation today, you can ensure your organization can better serve an ever-connected customer.