Resonated by multiple factors such as policy, economy, society, and technology, 5G has become an important part of the development of the digital economy. Digital financial business innovation is based on the development of information technology. It is necessary recognize the characteristics of 5G, think about the possible evolution trend of digital financial services in the 5G era and the direction of business model changes, and do a good job in fully welcoming the arrival of the 5G era ready.
The rapid promotion of 5G technology opens a new era of Internet of Everything
In 2018, the United States formulated the “National Network Strategy” to accelerate 5G investment and construction. Trump convened four major operators to release the “5Gfast” strategy. The EU formulated a 5G action plan in 2016 to serve vertical industries in 2020. Japan has also established a 5G construction promotion organization, and plans to commercialize 5G in the 2021 Tokyo Olympics .”
Compared with 4G, 5G is not only an evolution but also a change, it has the following three characteristics: First, ultra-high speed. 5G adopts eMBB technology, and the Internet speed is greatly improved. The transmission speed can reach more than 1Gb per second, and the peak value can reach 10Gb. The second is low latency. 5G adopts uRLLC technology to realize reliable communication with ultra-low delay. The delay can be improved from 10ms in the 4G era to 1ms. The third is massive connections. 5G adopts mMTC technology to realize the interconnection of everything, and the number of connected devices per square kilometer can be increased from 10,000 in the 4G era to 1 million.
In recent years, the Internet of Things has entered a new stage of rapid development, and the scale of Internet of Things devices has shown an explosive growth trend. At the same time, major Internet companies, chip companies, and operators have also increased their investment in the research and application of the Internet of Things ecosystem, and laid out the Internet of Things ecosystem in advance. The commercialization of 5G technology will usher in a new era of Internet of Everything. It is not only a revolution in communication technology, but also an industrial revolution, closely connecting artificial intelligence, the Internet of Things, big data and cloud computing , bringing fission-type development to all walks of life, and creating a new business model And application scenarios will surely bring new momentum to financial service innovation and upgrading, catalyze the birth of new business formats, and trigger a leap in productivity.
Innovation and Thinking of Bank’s Digital Financial Business in the New Situation
In the context of the rapid iterative promotion of 5G technology, commercial banks have successively launched 5G technology applications in smart branches. Next, through further in-depth integration with digital financial services, the popularization and application of 5G technology will also bring greater and more in-depth changes to the banking service model.
The ultra-high-speed and low-latency characteristics of 5G will drive mobile banking to differentiate between a high-end and smart APP service model and a universal and low-frequency web version (including mini programs) service model.
Taking online banking as an example, limited by the speed and delay of network access, there were two service modes, client and web version, in online banking around 2000. Since 2005, due to the popularization of broadband, online banking has turned to browser-based of the service model.
ion of 5G and voice recognition, portrait recognition, VR/AR, and artificial intelligence technologies, for high-end or high-frequency mobile banking customers, the mobile banking APP will provide hundreds of products and services from current customers in text form. The “passive product delivery” model selected in the “Transformation” model is transformed to an “immersive demand response” model that integrates voice, video, and even VR/AR intelligent interaction options, and provides a customer experience that is better than manual services at branches.
At present, mobile banking APP needs to develop different versions for different operating systems and adapt to different models. At the same time, it is necessary to guide customers to download and install, and the threshold for customers to enter is high. However, given that the mobile web version experience is much lower than the APP mode, major banks still dominate the APP mode. With the promotion of 5G, referring to the development history of online banking, it is expected that the loading speed and interactive response of the web version will be greatly improved.
From the perspectives of reducing R&D costs, shortening the innovation cycle, and lowering the threshold for customers, the web version is for low-frequency mobile banking customers. Or become a direction for the realization of mobile banking services.
5G will be the first to test the water application in some scenarios with high-value attributes and high application frequency (such as medical treatment, education, government affairs, transportation, etc.). Due to the relatively high initial investment cost of operators, it provides relatively loose price flexibility for all parties involved in 5G applications to establish various business models. Commercial banks should make full use of the promotion bonus period, and jointly research and launch market “killer”-level products and services with operators, and use operators’ existing ecological layout to simultaneously cut into medical, education, government affairs, transportation and other scenarios, and jointly build multiple parties.
In the 5G technology environment, a larger population of people and smart devices are connected to the Internet, generating rich and true data, and achieving the integration of “information flow, capital flow, and physical flow”. Banks can use financial technologies such as big data, cloud computing, mobile internet, and the Internet of Things to carry out centralized operations to dynamically portray the risk views and revenue views of customers, businesses, and other entities, and provide decision support. In the future, in the 5G network environment, the use of 5G slicing can achieve end-to-end high-security and high-reliability wireless network characteristics, and gradually realize the implementation of 5G private network transmission pilots for specific customer groups, thereby greatly improving the security of digital financial business development coefficient.
The Internet is moving from the era of human-computer interaction and human-human connection to the era of Internet of Everything. Human-like smart devices will become important payment participants, and payment will shift from acquiring to connecting and to data. The importance of payment will not only be weakened, but will also gradually sublimate, playing the role of a data hub in the business ecosystem of the Internet of Things.
The first is that smart devices will gradually become payment participants with the same status as humans. In the era of the Internet of Everything, payment and payers will gradually break the current restrictions on natural persons and legal persons as a single subject. Human-like smart devices will increasingly become payers, and more new payment scenarios will be born, such as Smart cars, smart homes, etc., and new application scenarios need to match new payment solutions.
In the Internet of Things world, all objects will have a digital ID, and each ID will have payment attributes. From the perspective of banks, the carrier of ID payment attributes is a bank account. This bank account should not be limited to a bank account with people as the main body in the traditional sense. In the future, in addition to “people” can become bank customers, “things” with human characteristics may also become bank customers. “Smart things”, such as smart buildings, delivery robots, and automatic parking lots, will have the ability to interact with human customers and other smart things, and initiate payment, settlement, investment and other diversified service requests to financial customers.
This kind of scenario will also cause difficulties. In the Internet of Things era, there will be too many ID problems: if you can’t identify it, you can’t protect it; if you can’t protect it, you can’t control it; if you can’t control it, It does not belong to us.
Therefore, the identification and management of ID under the Internet will become the core subject of the banking industry’s deployment and development of the Internet of Things.
Secondly, the value contribution of payment will shift from acquiring revenue to connection and data. Merchants in the scene that have more opportunities to contact consumers may gain a stronger voice in technological changes, and the improvement of merchants’ bargaining power will encourage merchants to obtain more and better services from payment service providers, and further reduce The direct profit margin of payment does not even rule out the occurrence of “negative rates”-that is, payment service providers need to pay fees to the system and merchants before they can enter. Payment eventually becomes a way to attract customers (users, merchants, service providers). The business model of providing payment services is eroded within the system. From this perspective, this will encourage payment service providers to transform into value-added services, mine payment-related data and obtain revenue from services such as precision marketing and consumer finance.
The third is the payment experience, especially small high-frequency payments will gradually shift to non-inductive payments. The Internet of Things and artificial intelligence will significantly improve the efficiency of the process of “human recognition”, through the “unconscious” behavior of people (such as walking gait, typing rhythm, etc.), “more natural” interaction methods (such as voice Interaction, brain-computer integration, etc.) for feature collection, and finally people can complete identity recognition with fewer or no attached objects. The user interaction in each scene will change from active interaction to non-sense interaction, which further enhances the payment experience.
Fourthly, credit payment has gradually become the mainstream payment method. The integration of big data, artificial intelligence, and 5G has made real-time credit granting possible, and payment based on credit accounts will gradually become the mainstream payment method.
In summary, the application of 5G technology is accelerating to land, and the significant improvement in communication efficiency has promoted the rapid development of the business ecosystem of the Internet of Things, which in turn promotes the development of bank digital finance into the “second growth curve”, in terms of service channels, business functions, risk control, etc. Profound changes are about to take place. In the face of such a development window period where opportunities and challenges coexist, whether the bank can effectively make arrangements in advance determines whether the bank can break through the existing development pattern in the next era and achieve overtaking by changing lanes.