Apr. 26, 2019
Every year, Nomura Research Institute (NRI) brings out a publication named “IT Roadmap”, which discusses the latest trends in IT and the forecast for the next five years. The latest 2019 issue introduces the latest trends and future prospects of “5G (Fifth-generation mobile communication system)” and “Information banking and credit scoring business”.
Fifth-generation mobile communications system (5G): Eiji Fujiyoshi, IT Infrastructure Technology Strategy Office
5G to be launched in Japan in 2020
For mobile operators, 5G is a once-in-a-decade innovation in the telecommunications system, and its impact is expected to be felt across various related industries.
5G offers three features: ‘High-speed and high-capacity’, which increases the communication speed to 10-20 Gbps; ‘Low latency’, which reduces the time lag between the device and the base station for data transmission to 1 ms; and ‘Multiple connections’, which allows multiple devices to be connected to a single base station.
Overseas, fixed-line communication services using 5G began in the US in 2018, while 5G services for mobile phones began in South Korea and the US in April 2019. Japan is planning to provide its pre-service in the summer of 2019 and the complete service in the spring of 2020.
Impact of 5G on businesses
Successfully realizing digital transformation (DX) using 5G
In 2020, two forms of communication will be provided as 5G services: eLTE with improved 4G, and 5G-NR (NewRadio) with newly established radio frequencies. They can be applied to areas that mainly require high-speed data communication, including urban areas and event venues such as stadiums. It is expected that 5G services will require several years before people across the country reap their benefits.
Although the prospects of 5G are currently unknown, the roadmap of evolution will remain unchanged. This is because with mobile communication networks being revamped, they not only have to provide smartphone-related services but also be able to support the realization of a smart society. Companies should consider using 5G in their DX initiatives while focusing on the use of non-networking areas such as platform technologies, including artificial intelligence and data that can be acquired from 5G.
Outlook of information banks and credit scoring businesses: Makoto Shirota, Digital Platform Development Department
Information banks mediate between individuals and businesses for transactions relating to personal data
Credit scoring quantifies creditworthiness of individuals
Credit scoring is a service that analyzes the personal data of an individual using AI and quantifies his or her creditworthiness. This score allows consumers to receive various benefits such as preferential interest rate at the time of borrowing.
In January 2015, Zhima Credit (Sesame Credit), a credit scoring system embedded in the Chinese smartphone-based payment app Alipay, was launched. This is because the spread of credit cards has been slow in China, and there was no way to measure creditworthiness.
Zhima Credit scoring calculates a credit score for each consumer based on their Alipay payment and service usage records, educational background, work experience, and ownership of assets such as personal car and home.
On achieving a score above a certain level, Chinese consumers get various benefits, such as easier access to visas of various countries and hotel reservations without having to pay deposits. This is why they focus on raising their scores.
In Japan, J.Score, a joint venture subsidiary of Mizuho Bank and SoftBank, launched Japan's first credit scoring service “AI Score reward” in October 2018. Individuals’ credit scores are calculated by having them register and answer various questions related to their hobbies, educational background, occupation, income, expenses, and asset ownership. In addition, scores can be further increased by linking transactions with Mizuho Bank, SoftBank, and Yahoo! JAPAN.
The extent to which credit scores will permeate in Japan is unknown, but assuming that social infrastructure will be established in the future, it could result in issues such as ensuring the reliability of scores, taking measures against those who attempt to raise their scores by illegal means, and eradicating concerns about disparities or discrimination.
In the future, both information banks and credit scoring systems will seek to expand the range of data they collect and the number of partners. However, as both services are involved in collecting personal data of consumers, there is a possibility that they may merge in the future.