5G tech to drive banking rebound

ZIMBABWE’S financial services sector has an opportunity to tap into the multi-billion-dollar technology market if it leverages on the new 5G network in its digitisation drive to increase efficiency, promote financial inclusion and prevent fraud, a top industry expert has said.

Global Renaissance Investments chief executive Ngoni Dzirutwe said as the mobile sector rolls out 5G technology this year, banks and insurance firms had to prepare by developing their 5G strategies to compete with their fintech rivals. Otherwise they risk falling behind in the digital economy.

“The speed increase brought about by 5G networks will enable financial institutions to perform more complex processes much more quickly, minimising waiting times for things such as ID verification for new customers on boarding and loan tracking,” he said.

A recent report by multinational advisory and tax services firm PwC estimates that the use of 5G in financial services would bring US$85 billion to the industry by 2030.

Listed mobile network provider Econet Wireless became the first company in Zimbabwe to roll out 5G service in February, which is poised to help banks and other finance companies deliver innovative mobile services consumers prefer.

Dzirutwe said the introduction of 5G meant there would be better performance of existing bank applications and websites.

“Despite the renewed push for digital because of the COVID-19 pandemic, many mobile banking applications still lag behind when it comes to functionality. Frequent complaints include the slow speed of mobile applications and the frequency of crashing or timing out. 5G will enable banks to clean up these inconveniences and help them provide a more seamless customer experience,” he added.

Several banks in Zimbabwe, including Standard Chartered, Steward Bank, Stanbic, NMB and CBZ among others, are on a digitisation drive that has resulted in transaction efficiencies.

Dzirutwe said 5G would also help further the government’s financial inclusion agenda by taking banking services to rural locations.

“Despite decades of sustained efforts by governments across the world, a large chunk of the global population remains unbanked. However, 5G powered pop-up branches or mobile banking will result in the majority of people living in rural and marginalised areas having access to banking and insurance services,” he said.

Market analysts also believe that 5G will provide faster and simpler payment options, which will make mobile and digital payments even more appealing to the masses and merchants alike, further boosting usage.

This will be key to economic growth.

“The outbreak of COVID-19 led to an increase in digital payments by consumers, as it offered a contactless form of transaction and unparalleled convenience during the lockdown period. As a result, commerce — especially e-commerce — experienced the boost of a lifetime. This is an area where financial institutions can play a key role in expanding the market with the help of 5G,” said Philemon Mare, a financial analyst with a South African merchant bank.

“Another major advantage of 5G will be the ability of banks to improve proactive fraud prevention and take informed decisions in real time. Processing data, verifying the nature of transactions, confirming transaction amounts and funds availability, consulting multiple data instances in real time, coupled with customer geolocation and merchant ID, will reduce fraud detection errors and false positives, thereby protecting consumers and the bank’s bottom line,” he said.

According to PwC, losses from financial frauds will be reduced by over US$30 billion by 2030 thanks to the 5G security measures.

International trends have also shown that in addition to 5G, the ongoing growth in mobile phone penetration will pave the way for a bigger and more sophisticated digital payments market. E-wallet services will enable mobile payments from a single account, empowering consumers as well as merchants and agents.

Meanwhile, Global Renaissance Investments will next month host its annual ICT conference and awards at Meikles Hotel in Harare where experts are going to unpack the future of 5G and how industry and several sectors of the economy can adapt to the new technological trends.

The speakers include ICT minister Jenfan Muswere, Econet chief operations officer Kezito Makuni, NMB Bank digital executive Cloud Nhau, DHL Zimbabwe country manager Shuvai Mugadza and Loice Ngulube an ICT executive with POSB.-newsday