A line to the future.

When discussing mobile technology and its great leaps forward, it can be easy to forget how far we’ve already come and, more specifically, what is making it possible. Seemingly overnight we have moved into the 5G era without recognising what such a transition promises.

In the beginning there is 5G

Contrary to what its name suggests, 5G is much more than an incremental change from previous network technologies. While 3G introduced us to mobile technology and 4G made us comfortable with its applications, 5G stands to reshape our lives in and out of the office entirely.

Why? 5G enables data transfers at record speed while shrinking latency – the time it takes for tech to be stimulated and to respond – to almost zero. As a result, the devices already in our hands will be supercharged to fulfil our every demand – think autonomous vehicles and smart homes.

5G is a breakthrough technology, not just an incremental innovation. It will act as the enabler for future experiences, whether that’s accessing seamless, highly-sophisticated financial services via your mobile device, or remote medicine delivery and smarter, more sustainable energy grids.

Telcos and the future of finance

Different industries are reacting to 5G-generated opportunities in various ways. In the world of finance, companies are vying to operate on the innovation frontline, hoping to win customer loyalty through new and improved services.

In the UK regulators have proven open-minded and banks are co-operating with fintechs to foster and introduce innovation to the market. Interestingly, telcos may even have an advantage over fintechs when it comes to offering financial services that carry risk.

Grégory Marchat, Co-Head of Global Banking and Head of UK Financial Services at Forvis Mazars, explains, “At first, banks were disrupted by fintechs, which offered a more attractive experience – with more ergonomic interfaces and better leveraged data. But they have partly closed the gap since and could close it further thanks to two inherent advantages. The first is their existing client portfolio. The second is their mastery of regulation complexity. Compared to payment licenses, credit licenses are restricted and difficult to obtain. This is where telcos probably have an edge over fintechs as the former are more credible in terms of the capital, teams and processes that are necessary to manage risks and compliance.”

5G and driverless cars

It is not just in finance where 5G is reshaping industries. Grégory Derouet and Christian Back, Co-Heads of Automotive Services at Forvis Mazars, say 5G is already playing out in the automotive world, which is evolving its business model to accommodate drivers who will, soon, be able to take their hands off the wheel.

“5G is going to advance the level of vehicle automation – potentially – up to the 5th level, which is a totally driverless car. Such a level of automation requires cars to communicate with one another and with their environment… imagine traffic lights warning cars they’re about to change colour, or the car in front warning yours that is has to urgently brake. 5G is expected to be reliable enough to enable that level of information exchange and decision making.”

They add, “5G is a cornerstone of the business model evolution and we expect a large part of the auto-industry to move towards a ‘mobility-as-a-service’ model. The race is already on to offer the most enjoyable, integrated and hassle-free experience.”

To find out how telcos are unlocking – and gaining from – experiences like this, see our ‘seamless experiences’ blog.

Telcos existing advantages

Amidst the rapid pace of technological development and the crowded playing field when it comes to finance and the customer experience, it’s important to reflect on the advantages already in telcos’ corner. In our Future of Telcos report, we outlined the following four:

1. Straightforward customer identification

“The phone number is a great asset to that end,” says Emmanuel Dooseman, Head of Banking, Forvis Mazars. “It is unique, short and can be committed to memory.”

2. Smart recommendations

As 5G meets IoT, big data and AI, there are more opportunities to deliver timely and relevant advice to customers. A smartphone could remind the customer they have a coupon for their next purchase, or an algorithm could suggest a customer saves money when their financial situation allows it.

3. Invisible transactions

A shopping experience where retail technology recognises you and can access the necessary data meaning you don’t need your wallet. Some retailers are already trialling such technology.

4. Reward and loyalty

No one wants to manage dozens of loyalty cards in their physical wallet but customers with a long-standing bond want to be treated differently to first-timers. The digitisation of loyalty programmes will lead to hassle-free rewards and build greater brand allegiance.

This article originally appeared on the Forvis Mazars InsightsForGood blog and is authored by JULIAN HUVÉ: Partner (Paris) Head Of Telecommunications Services

Our local contact: TERENCE GOVENDER: Director, Forvis Mazars IT Advisory.