EqualOcean held an exclusive interview with William Genovese, Vice President of Corporate Strategy Planning for Banking and Financial Markets at Huawei. We discussed the status quo of the fintech industry, the promise of the new generation of wireless technology and how the Chinese electronics juggernaut is leveraging the latter to disrupt the former. Below are the key insights from our conversation.
In this chapter, we touch upon 5G and fintech. Check out the rest of the interview:
Prerequisites of mobile strategy
“Huawei’s financial services strategy is built on three pillars from a technology enablement perspective.
If a company does not have a digital and mobile phone and smart device strategy, then we do not really need to have this discussion. Digital is a broader term, but for 5G specifically, it is the mobile. That is the first prerequisite. If a company is more of a traditional outfit, maybe it is running a business on the Internet, laptop or PC and does not have mobile consumption, probably it is not the time for them to access 5G. However, if you are engaging from a business to consumer perspective, namely ‘B2C,’ or even ‘B2B2C,’ and you have a mobile strategy, then invariably the company is going to start to look at different aspects that it wants to get out, from the rental price to the consumer in the mobile device.
The first use case that comes to mind in terms of capturing the information that a consumer is using and the way they are interacting with the company from the mobile device is analytics and Artificial Intelligence (AI). That is the second big piece of the puzzle of financial services in terms of broad categories of use cases. Thus, companies want to be able to harness answers from the device: What are people doing? What are they browsing? What are they paying for? And then we get into financial services construction buckets.
The third piece of tech enablement is open platforms. This is not so much from a 5G perspective, but obviously if there are a lot of devices on play and they need to provide the three functions to consumers, across industry models and platforms, then they have to be open, especially with the coming of connection of smart devices and IoT. They cannot be locked down so there are open APIs.”
Is the wireless upgrade worth implementing?
“An important thing to consider is the expectations from consumers and what that brings to providers in the country from a financial inclusion perspective. Huawei is an example that has built and provided a mobile money solution as a digital wallet. Then we sell it to mobile network operators.
For example, in Africa we worked with Safaricom and Vodafone to build MPESA. We built the mobile money software and provide infrastructure for them, and they use this offering for their customers to transact for payments and next for microfinance on their mobile devices. That is the mobile money solution. We do the same thing in Bangladesh, some regions in India and Indonesia as well. But all the countries and telcos, they want to offer a mobile wallet solution to their customers. So they need their customers to be able to send money via the mobile device and without bank accounts in some cases.
The next thing that is going to happen is that 5G players will want to expand their services because the consumers are buying more width and more latency to do more things. For example, customers may want to do micro-finance, some quick lending. There are additional operations with bandwidth and latency in terms of their decisions, and maybe facial recognition for identity. That is requiring 5G. As the telcos move more into credit lending, that justifies the investment in 5G.”
Three pillars of 5G-enabled fintech
“To make 5G-enabled fintech happen, there are three dimensions. Number one is the sharing economy. In these emerging countries and probably some mature economies, the sharing economy has developed as new business models, which is the second pillar.
Now, we have all these large conglomerates in ride sharing, food delivery, service delivery companies, such as Grab, GoJek, Uber in the west. Most of them are moving into different industries now. For instance, they are expanding the food delivery businesses since nobody's ridesharing right now because of the epidemic. People are still doing delivery right now so there are new business models from companies that were in the field before. And it seems to work.
The third pillar is technology enablement. Without the tech, in terms of these massive platforms and mobile services, those companies are not going to get very far. It is not just one technology but rather a convergence of different technologies. So there is a need for AI, IoT, big data and other concepts that can be enabled in terms of scalability and performance by 5G for the mobile device.”