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HOME NRI JOURNAL IT Roadmap 2019: Recent IT Trends and Future Forecasts


Innovation magazine that generates hints for the future


IT Roadmap 2019: Recent IT Trends and Future Forecasts


Makoto Shirota

Eiji Fujiyoshi

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

These three main functions, which are the USPs of 5G, are specific to wireless communications. Thus, for governments and mobile operators, they have a great impact on infrastructure innovation, but are less attractive for companies to use in their businesses. It is true that companies can enjoy high-speed communications similar to wired networks but without the physical cable connections by using 5G. However, unlike internet-based services, the availability of low latency and multiple-access capabilities depends on the carrier. For example, in case of low latency, it is necessary to install a server in an environment owned by the carrier because there is little flexibility in constructing a system. In addition, new wireless technologies other than 5G have recently emerged, such as LPWA (Low-Power Wide-Area) communications and low-power PANs (Personal Area Networks). Thus, companies have more options for wireless communication.
As a result, mobile operators are required to create services by effectively utilizing 5G, i.e., services that users find attractive because of features like large capacity, low latency, and multiple-access. For example, this could mean aiming to streamline operations by combining the knowledge that was conventionally dependent on people with AI using 5G large-capacity communications.
As one of these approaches, NRI is conducting 5G, RFID, and drone experiments in the brewing industry together with KDDI and Aizu Activate Association. The aim is to remotely monitor the brewing process using images, videos, and temperature sensors within the brewing plant, and use AI on the accumulated images to create values such as process control, new product development, knowledge process of workers, and skill dissemination.

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

An information bank is a mechanism that allows consumers to receive some compensation in return for providing data such as their behavior and purchase history to companies. The vast amount of personal data collected through the internet by major U.S. IT companies, represented by GAFA, has been used for advertising and sales to generate enormous revenues. However, as Japanese companies have not made much progress in their use of data, the government has been leading and actively working on this mechanism. After completing the experimental phase in 2018, the information banks are expected to be fully implemented post-2019.
The Mitsubishi UFJ Trust and Banking Corporation's "DPRIME" (tentative name) is one of the banks aiming to launch services in the middle of FY 2019-20. DPRIME has partnered with several startup companies and plans to provide services that utilize a variety of consumer personal data such as assets, activity history, or steps walked.
The challenges in promoting information banks include determining a way to acquire consumers’ consent and setting compensation in line with the value of the data. Next, it is important to secure the routes for purchasing and selling data, i.e., how much data can be collected from consumers and whether to involve sponsor companies that purchase the data. Further, it also requires the implementation of an easy-to-use data control function.

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.

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